CITATION: Tomoski Developments Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 263 DIVISION: General Division APPLICANT PARTIES: Tomoski Developments Pty Ltd RESPONDENT Commissioner for Fair Trading, Office of Fair Trading FILE NUMBER: 043146 HEARING DATES: 26/10/2004 & 11/02/2005 SUBMISSIONS CLOSED: 05/10/2005 DATE OF DECISION: 11/22/2005 BEFORE: Molony P - Judicial Member APPLICATION: Home Builder - issue of contractor licence - Home Building Act - home builder - issue of contractor licence MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Home Building Act 1989 Home Building Regulation 2004 Licensing and Registration (Uniform Procedures) Act 2002 Appeal of Trevor James Pye DC (NSW) 19 August 1976 (unreported) Australian Broadcasting Tribunal -v- Bond and Ors (1990) 170 CLR 321 Bechara v Builders Licensing Board, District Court of NSW, unreported, 10 June 1980, Cripps DCJ Beijani v Commissioner of Fair Trading [2004] NSWADT 262 CASES CITED: Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Hughes & Vale v NSW (1955) 93 CLR 127 Kioussis -v- Director General, Department of Fair Trading [2002] NSWADT 2 Re Brennand & Australian Casino Surveillance Authority (1995) 38 ALD 794 Re Percival and Australian Securities Commission (1993) 30 ALD 280 APPLICANT REPRESENTATION: D Perrignon, Barrister RESPONDENT A Grey and A Wilson, Solicitors ORDERS: The decision of the Commissioner to refuse application by Tomoski Developments Pty Ltd for a contractor licence is affirmed. REASONS FOR DECISION Background 1 Tomoski Developments Pty Ltd is a residential property development company, which has been undertaking residential developments in Sydney for some years. It has two directors, Mr Luke Tomoski and his wife. Mr Tomoski, who is a cabinet maker by trade, is the driving force behind the company. 2 Mr Luke Tomoski and Tomoski Developments in 2001 made applications for both an individual and company contractor licence. To assist him in making those applications Mr Tomoski engaged the services of a "licence broker" he knew as Tony Sissane. Mr Tomoski completed the application forms and obtained reference and other documents in support of his application, and arranged for Mr Sissane to review and then submit the application. 3 In support of the applications as lodged with the Commissioner by Mr Sissane, was a copy of a NSW TAFE Associate Diploma of Applied Science (Building) in the name of Mr Tomoski, certificate number 1041753 dated July 1979, and certified as a true copy of the original by Tony Sissane JP. There was also a similarly certified copy of Mr Tomoski's NSW TAFE Furniture Craftsman's (Cabinet Making) Trade Course Certificate dated 31 September 1979. It is agreed that Associate Diploma of Applied Science (Building) was forged, and that Mr Tomoski has never held that qualification or undertaken that course. The Furniture Craftsman's (Cabinet Making) Trade Course Certificate is his. 4 In April 2001 an officer of Fair Trading advised a person they believed to be Mr Tomoski, by phone, that a spot check had been unable to verify his enrolment in the Associate Diploma of Applied Science (Building), and requested a certified copy of his academic record. Mr Tomoski vehemently denies that he was a party to this conversation, and believes that the officer from Fair Trading in fact spoke to Tony Sissane, who masqueraded as Mr Tomoski. This is consistent with the contact details provided on the applications which were all, in fact, those of Tony Sissane. Subsequently, Fair Trading received a faxed incomplete academic record in Mr Tomoski's name, certified by Tony Kazana JP. It is not in dispute that Tony Kazana is an alias of Tony Sissane. 5 In June 2001 the Commissioner determined to refuse Mr Tomoski's and Tomoski Development's application on the grounds that Mr Tomoski had not provided evidence of a suitable building qualification and, with respect to both applications, that he was not a fit and proper person to hold a contractor licence. Advice of these decisions was sent to the address nominated on the applications (Tony Sissane's). 6 The decision to refuse Mr Tomoski's application for an individual contractor licence was subsequently affirmed on internal review on 13 November 2001. 7 On 8 November 2002 Tomoski Developments, via its solicitors, lodged a fresh application for a company contractor licence under the Home Building Act 1989. Submissions in support of that application asserted that Mr Tomoski, in making the earlier applications was not aware that fraudulent documentation had been submitted in support of them, and that he had not authorised their use. This application was refused on 7 January 2003 on the ground that Mr Tomoski, as a director of Tomoski Developments, "was not a fit and proper person to hold a contractor licence and otherwise if of good character." 8 An internal review of that decision was requested on 14 January 2003. Consideration of the internal review was put on hold pending the outcome of an investigation by the Independent Commission Against Corruption into a number of applications made for building and trade licences to the Commissioner, including those made by Mr Tomoski. ICAC reported in November 2003. 9 On 19 April 2004 a delegate of the Commissioner completed the internal review, and affirmed the earlier decision to refuse Tomoski Development's application for a company contractor licence on the basis that Mr Tomoski is "not a fit and proper person to hold a contractor licence and is otherwise of good character to be the director of a corporation that applies for a contractor licence." In the reasons for that decision the delegate made the following findings of fact: "… 3.3 On 21 March 2001, NSW TAFE advised that they had no record of Luke Tomoski having enrolled for the 'Associate Diploma in Applied Science (Building)' and that they only had a record of the applicant completing the 'Furniture Craftsmen's (Cabinetmaking) Trade' course'. 3.4 On 17 April 2001, Luke Tomoski was told that that NSW TAFE could not verify that he had enrolled or completed the 'Associate Diploma in Applied Science (Building)' and that he would need to submit a certified copy of his 'Transcript of Academic Record' in order to ascertain his student number. Luke Tomoski agreed to submit the transcript. 3.5 In the conversation of 17 April 2000, Luke Tomoski did not dispute that he held the fraudulent 'Associate Diploma in Applied Science (Building)' and agreed to submit a transcript of a qualification that he has never held. 3.6 Between 21 May and 5 June 2001, a Transcript of Academic Record in the name of Luke Tomoski was faxed to Fair Trading. The Transcript was an incomplete 'Certificate III in General Construction (Trade)' and certified by Tony Kazana JP (alias of Tony Sissane), registered number 9801923. 3.7 Luke Tomoski was aware on 17 April 2000 that the fraudulent `Associate Diploma in Applied Science (Building)' had been submitted with the application and did not disclose this to Fair Trading. Luke Tomoski agreed for a transcript to be faxed of a course that he knew he had never undertaken through NSW TAFE. 3.8 Luke Tomoski has demonstrated that he is not a fit and proper person and is otherwise of good character to be a director of a corporation that applies for a contractor licence. 3.9 In consideration of the Director-General's delegate being of the position that requirements set out in the Regulations had not been satisfied, the delegate was required pursuant to Section 20(3)(a) of the HBA to refuse the application." 10 On 14 May 2004 Tomoski Developments lodged this application to review that decision pursuant s.83B of the Home Building Act 1989 and s.38 of the Administrative Decisions Tribunal Act 1997. 11 In the course of the appeal the grounds relied on by the Commissioner were enlarged to include whether Mr Tomoski is a fit and proper person due to his involvement as a director of Tomoski Developments in the building of three residential properties, allegedly in breach of the Home Building Act 1989. 12 Additionally, the Commissioner in written submissions in reply, raised the issue of whether, if it were found that Mr Tomoski is fit and proper, the Tribunal could be satisfied that Tomoski Developments intends to employ a qualified supervisor in compliance with the requirements of the Act and the Home Building Regulation 2004. Issues 13 The issues to be determined in this appeal are: a) whether the circumstances surrounding Mr Tomoski's application for an individual contractor license in 2001 and the submission of the fraudulently altered diploma lead to the conclusion that he is not a fit and proper person to hold a contractor license; b) whether the evidence of in relation to the building work carried out by Tomoski Developments, and Mr Tomoski's involvement in that work, demonstrates that the work was done in breach of the Home Building Act 1989 and that as a result Mr Tomoski is not a fit and proper person to hold a contractor licence; and c) if not, whether the Tribunal can be satisfied that Tomoski Developments intends to employ a qualified supervisor in compliance with the requirements of the Act and the Home Building Regulation 2004. The Statutory Framework 14 The Home Building Act 1989 is essentially a consumer protection act which regulates residential building work in NSW. It provides for the licensing and regulation of those engaging in residential building work, and makes provision as to their competence, fitness and solvency, and for their discipline. It regulates contracts for residential building work, both as to their content and who may enter them. All contracts are to be in writing, signed by the parties and comply with the stipulations of the Act and Regulation as to their content (s.7). The Act implies non-excludable warranties as to the quality of residential building work and services undertaken in NSW, and provides a mechanism for the resolution of disputes relating to residential building work. 15 The Act establishes a mandatory home warranty insurance scheme to provide protection to those who enter contracts for residential building work, and who own homes constructed or renovated under those contracts. It prohibits a person for doing residential building work unless a contract of insurance that complies with the Act is in force in relation to that work in the name of the person who contracted to do the work. By issuing contractor licences and certificates the Commissioner represents to members of the public that the contractor meets the fitness, competency and solvency requirements of the Act and is authorised to do the work specified in his or her licence: s.21(1)(a). 16 Section 3 of the Home Building Act 1989 provides a definition of "building work". " building work" means any work involved in, or involved in co-ordinating or supervising any work involved in: (a) the construction of a dwelling, or (b) the making of alterations or additions to a dwelling, or (c) the repairing, renovation, decoration or protective treatment of a dwelling." 17 Section 12 prohibits unlicenced building work: "An individual must not do any residential building work, or specialist work, except: (a) as, or as a member of a partnership or an officer of a corporation that is, the holder of a contractor licence authorising its holder to contract to do that work, or (b) as the holder of an owner-builder permit authorising its holder to do that work, or (c) as an employee of the holder of such a contractor licence or permit." Section 13 prohibits unqualified building work: "(1) An individual must not do any residential building work, except: (a) as the holder of an endorsed contractor licence, a supervisor or tradesperson certificate or an owner-builder permit, authorising its holder to do that work, or (b) under the supervision, and subject to the direction, of the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise that work." 18 Section 19, when read with section 6 of the Licensing and Registration (Uniform Procedures) Act 2002 (which applies to application's for contractor licences: section 19(2) enables a company to apply for a contractor licence. 19 Section 20 deals with the issue of contractor licences and relevantly provides: "(1) The Director-General must reject an application for a contractor licence if: (a) the Director-General is not satisfied that the applicant is a fit and proper person to hold a contractor licence, or (b) … (1A) Without limiting subsection (1) (a), in determining whether an applicant is a fit and proper person to hold a licence the Director-General is to consider whether the applicant is of good repute, having regard to character, honesty and integrity. (2) The regulations may fix or provide for the Director-General 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 Director-General must reject an application for a contractor licence if: (a) the Director-General is not satisfied that any such requirement would be met were the contractor licence to be issued, or (b) the Director-General 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 Director-General 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, or the supplying of a kit home, of a kind proposed to be authorised by the contractor licence. …" 20 Additionally clause 25 of the Home Building Regulation 2004 then provides that: "(1) Before an authority (other than an owner-builder permit) is issued, the Director-General must be satisfied that: (b) any individual who is an applicant, and each individual who is a member of a partnership, and each director of a corporation that is a member of a partnership or of a corporation, that is an applicant: … (v) is a fit and proper person to hold the contractor licence and is otherwise of good character, and …" Relevant person is defined by sub-clause (2)(c) to include each director of an applicant corporation. Thus each director of an applicant corporation must a fit and proper person to hold the contractor licence and otherwise of good character. 21 Finally, it should be noted that the scheme of the Act and Regulation requires corporations which hold contractor licences to employ nominated supervisors. Clause 19(1) of the Regulation provides: "(1) Before a contractor licence is issued, the Director-General must be satisfied that: (a) the applicant has, or proposes to have, such numbers of nominated supervisors for the contractor licence as the Director-General considers are needed to ensure that all work for which the contractor licence is required will be done or supervised by qualified individuals, and … (2) An individual may be a nominated supervisor for a contractor licence only if the individual: (a) holds an endorsed contractor licence or a supervisor certificate that authorises its holder to supervise some or all of the work done under contracts for which the contractor licence applied for or held is required, and (b) is, or is proposed by the applicant or holder to be, a full-time employee of, or a member of the partnership or director of the corporation that is, the applicant or holder, and (c) makes a consent declaration that is lodged with the Director-General and has not been revoked. (3) In subclause (2) (b), full-time employee means an employee who is required, by the terms of employment, to work for his or her employer otherwise than on a casual or temporary basis." The 2001 Applications 22 There is a plethora of evidence relating to the circumstances surrounding the applications for contractor licences. These range from Mr Tomoski's evidence to this Tribunal and to ICAC, and statements made to the Commissioner and in support of this appeal. 23 Put shortly, Mr Tomoski said that he had been contemplating obtaining a contractor licence for some time, and had made a number of approaches to the Department of Fair Trading, both by phone and in person, to find out whether he was eligible for a full contractor licence. He had difficulty in obtaining a satisfactory answer, because his trade qualification did not easily fit within those mentioned in the available material. When he asked officers of the Department of Fair Trading, he could not get a satisfactory answer as to how much practical experience in residential building and construction he would have to demonstrate. 24 From a contractor at one of Tomoski Development's development sites, he heard of a migration agent who also handled licence application to the Department of Fair Trading for contractor licences. He requested information about this and was referred to Tony Nehme, a relative of the contractor, who knew the migration agent. Tony Nehme runs a men's clothing store in Parramatta. The contractor told Mr Tomoski that the migration agent, called Tony, worked in Parramatta. He agreed to ask Nehme to contact the Tony to see if he would apply to licences on Mr Tomoski's behalf. He reported back that Tony would do the applications for him at a cost of $20,000.00. 25 Mr Tomoski said he thought the cost was high and made inquiries of a solicitor he knew who does migration work as to the whether it was a fair price. He said that the solicitor told him that one could pay between $10,000 and $25,000 in an immigration matter. This reassured him that he was not being taken for a ride. Mr Tomoski said that, having received this advice, he contacted Nehme and asked him to get an opinion from Tony as to whether he qualified for a contractor licence. 26 Nehme rang back saying that Tony thought he had sufficient experience. Mr Tomoski then discussed with Nehme whether he would act as his intermediary with Tony. The reason for this was that Mr Tomoski was extremely busy on the development site in Bowns Road, Kogarah and could not get to Tony's office in Parramatta during business hours. He proposed seeing Nehme at his shop on Thursday nights, during late night shopping, to exchange documents as necessary. Nehme agreed to act as intermediary, and asked Mr Tomoski to bring his qualification and certificates across. This he did. At that time he gave Nehme $10,000 in cash for Tony, being half of Tony's fee. 27 Nehme gave him an application and supporting documents to fill in and return. This he did, returning the completed documents to Nehme, with a request that he ask Tony whether he qualified for a contractor licence. Nehme then got back to him, reporting that Tony thought he had the qualifications and experience necessary to obtain a contractor licence. 28 Mr Tomoski said that at one stage Nehme showed him photographs that Tony had taken of the buildings he had been involved in the construction of. This reassured him that Tony was not a "shonk". Nehme also asked him to obtain information from his accountant for the application, and later to provide passport photo's for the application. 29 Mr Tomoski said that some months passed and he again contacted Nehme to ask what was happening. Nehme checked and reported that the applications were in process. 30 In September 2001 Mr Tomoski received a letter at his home from the Department of Fair Trading advising him that an investigation was being conducted into his applications, and requesting that he contact the investigating officer. Mr Tomoski's evidence was, and has consistently been, that this was the first contact he had with the Department of Fair Trading relating to the applications. He had not had any communication with the Department of Fair Trading before then. He produced his mobile phone records in support of his statements that he had not faxed documents to or spoken with officers of the Department of Fair Trading. Those records show him being in locations which would make it extremely difficult or impossible for him to have faxed documents received by the Department of Fair Trading in support of the applications. 31 Mr Tomoski contacted the investigation officer as requested. He subsequently found that applications he had completed had been altered to delete all his contact details. His evidence was that the NSW TAFE Associate Diploma of Applied Science (Building) and academic record submitted in support of his application was not his, and that he had not seen them before, and had not submitted them. Mr Tomoski made a detailed statement to the investigation officers and later gave evidence in a closed hearing to ICAC. His evidence and explanations to ICAC and the Tribunal have been consistent, although he did not detail all of his dealings with Nehme and the $10,000 payment to the investigators. 32 Mr Tomoski told ICAC that he had subsequently contacted Nehme, and told him that Tony was a shonk, and to get his money back. Nehme had been successful in doing so. 33 Nehme was questioned by ICAC and has provided a statement in this proceeding. His evidence is essentially consistent with that of Mr Tomoski. 34 The evidence given to ICAC in relation to Mr Tomoski and Tomoski Developments is discussed at pages 21 -26 of the ICAC report (Report on the investigation into certain applications made to the Department of Fair Trading for building and trade licences, ICAC, November 2003). ICAC made the following findings of fact in respect to those applications: "Sissane represented to Tony Nehme that he specialised in arranging licences and other permits relating to such matters as immigration and building. Sissane, through Nehme, made an agreement to organise a building licence for Tomoski for a cost of $20,000. Sissane gave the DFT application and reference forms to Nehme who passed them on to Tomoski to complete. Sissane either organised to be taken or personally took four photographs of buildings that were either managed or built by Tomoski. Sissane received the completed application form and references from Tomoski via Nehme. Sissane received $10,000 cash from Tomoski, also via Nehme. The application consisted of the DFT Individual Contractor Licence application form, a TAFE certificate for Furniture Craftsmen's (Cabinet making) Trade Course for Tomoski, and various supporting references. Sissane amended and falsified the application form in that he inserted the following details: his own mobile telephone number; his business partner's postal address, PO Box 3648, Parramatta; the qualification Associate Diploma in Applied Science (Building), South Western Sydney TAFE. Sissane also attached to the application: a falsified copy of the Qualification of Associate Diploma in Applied Science (Building) under the name of Luke Tomoski, which he certified as being a true copy of the original; a falsified copy of the Transcript of Academic Record (Certificate 111 in General Construction — Trade) under the name of Luke Tomoski, which he also certified as being a true copy of the original. Sissane lodged the application with DFT on 8 March 2001 and paid the application fees of $342 in cash. Sissane gave Tomoski another DFT application form via Nehme and asked that the form be completed for a Company Contractor licence under the name Tomoski Developments [sic]. Tomoski had the form filled in and returned it to Nehme to hand over to Sissane. Sissane collected this application form and amended it by inserting his business partner's post office box number (3648, Parramatta); his own mobile telephone number and added the qualification of Associate Diploma in Applied Science (Building), South Western Sydney TAFE. Sissane lodged this application with DFT on 3 April 2001. Sissane received a refund cheque from DFT made out to Luke Tomoski on 23 October 2001 for $171. The cheque was posted to PO Box 3648, Parramatta. Sissane endorsed the cheque to 'Mikhail & Sons Pty Ltd' by falsifying Tomoski's signature, presented it on 20 November 2001 and payment was made to him. He returned $10,000 cash to Tomoski through Nehme. Sissane made a statement to the DFT dated 16 October 2001, the contents of which he knew to be false." 35 In respect to Mr Tomoski's conduct ICAC found (at p.25): "Tomoski was interested in obtaining a builder's licence and discussed it with a number of people, including Nehme. Tomoski was also told that Sissane was said to provide immigration advice. Tomoski enquired of other people what the costs were for processing immigration applications and believed that this could cost anything up to $20,000. He was aware that there were illegitimate operators in the building trade who were prepared to purchase licences at substantial cost. He made some enquiries of Sissane's credentials through Nehme. He was shown the photographs of his work, which were either taken or organised by Sissane. He obtained legitimate references and completed the Statement of Practical Experience which did not contain any false information. Against this, however, is Tomoski's evidence that according to his own calculations the DFT application fee was about $1,100 and all that remained to be completed was to lodge the application form with the DFT. On his own account he spent considerable time with Nehme in assessing Sissane and having the forms and materials organised. He did not disclose the extent of his dealings with Nehme and Sissane to DFT in his statement to DFT he did not disclose that he paid Sissane $10,000 to lodge the application. His explanation as to why $20,000 was an appropriate cost to lodge an application with DFT for a simple trade licence was not entirely satisfactory. Given the amounts he was paying, it does seem unusual that he would also submit to a process that involved dealing with a go-between operating out of a menswear shop and not seek to deal directly with Sissane himself. The state of the available evidence, however, does not meet the requisite standard such as to allow findings to be made that that Tomoski acted corruptly in his dealings with Sissane. In particular, there is no evidence that Tomoski was aware of the specific conduct Sissane engaged in when submitting the application." 36 The Commissioner submits that Mr Tomoski's conduct in engaging Sissane in the manner and on the terms he did, should be taken into account in assessing his knowledge, honesty and ability, and that as a result he is not a fit and proper person to hold a contractor licence. As he is a director of Tomoski Developments it follows that that Tomoski Development's application should be refused. 37 The Applicant submits Mr Tomoski is himself a victim of the fraud which ICAC found was perpetuated by Tony Sissane: that he played no part in and had no knowledge of the alterations to the applications after he gave them to Nehme, or in the submission of the NSW TAFE Associate Diploma of Applied Science (Building) and academic record. The Applicant submits that there is insufficient evidence for the Tribunal to conclude, when applying the standard in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, that Mr Tomoski was a party to the provision of false information to the Department. Further, the Applicant submits that the Tribunal should be loath to go behind the findings of ICAC. 38 In doing so the Applicant refers to the decision of Judicial Member Montgomery in Bejjani v Commissioner for Fair Trading [2004] NSWADT 262, another case relating to the ICAC investigation, where the Mr. Montgomery observed (at paragraph 107)- "Unless there is clear and unambiguous evidence that contradicts ICAC's conclusions, this Tribunal should be very slow in going behind them." I agree with that statement. ICAC has had the advantage of a detailed investigation into the issues, and the advantage of hearing from all relevant witnesses. There is, in my view, no evidence which would justify me in concluding other than as ICAC has done. While I share the reservations expressed by ICAC with respect to Mr Tomoski's conduct in engaging Sissane in the manner and for the price he did, I agree that there is no evidence that he played any part in claiming qualifications he did not have, or in falsely documenting those claims. 39 The internal review found that Mr Tomoski had spoken with a departmental officer on 17 April 2001 and was told that the Department could not verify that he held an Associate Diploma of Applied Science (Building). The internal review found that Mr Tomoski did not dispute that he held this qualification, and subsequently faxed the altered academic record. These matters were not considered by ICAC in its deliberations. At the commencement of the hearing Mr Grey, who then appeared for the Commissioner, conceded that there was no evidence that it was actually Mr Tomoski whom the officer spoke with. I agree with that assessment of the evidence. Mr Tomoski has at all times denied he was a party to that conversation, and that he faxed any documents to DFT. Given that Sissane had altered application to show his own address and contact numbers as Mr Tomoski's, the probability is that the departmental officer spoke with Sissane masquerading as Mr Tomoski. 40 In his evidence Mr Tomoski said that he is a man who trusts people until they demonstrate that they cannot be trusted. He then has no further dealings with them. He operates on trusts, and a person's handshake and word is good enough for him. He is not a man who is good at forms and details. This was readily apparent in the course of his evidence. He put his conduct in engaging and trusting Sissane, via the good offices of Nehme, in that light, and in the context of him having no free time due to his heavy involvement in the Bowns Road project. While I share the reservation expressed by ICAC with respect to this explanation, I can only conclude, in the light of the evidence, that it reflects on Mr Tomoski's gullibility rather than his honesty and integrity. 41 In submissions, at paragraph 10, the Commissioner drew attention to the inconsistency between the provision by Mr Tomoski in his own application of details of experience of covering seven and a half year. The Commissioner points out that this is short of the 10 years experience he requires as a carpenter and joiner, and five and a half years greater that he would require if in fact he did hold a Associate Diploma of Applied Science (Building). This, in my view, rather than indicating Mr Tomoski was aware of the fraud being committed, tends to support Mr Tomoski's evidence that he supplied details of his experience to Sissane, and queried whether it was enough. Sissane responded, via Nehme, that it was. I do not think that the experience disclosed by Mr Tomoski assists the Commissioner's contention that that I should draw adverse conclusions as to Mr Tomoski's honesty and integrity. 42 In Hughes & Vale Pty Ltd v The State of New South Wales (No 2) (1955) 93 CLR 127 at 156 Dixon CJ, McTiernan and Webb JJ said, in relation to the "fit and proper person" test that its purpose: "... is to give the widest scope for judgment and indeed for rejection. "Fit" (or "idoneus") with respect to an office is said to involve three things, honesty knowledge and ability. ." Consistently with the decisions of the High Court in Hughes & Vale Pty Ltd v The State of New South Wales (No 2) and Australian Broadcasting Tribunal -v- Bond and Ors (1990) 170 CLR 321 the holding of a contractor licence under the Act attests that the holder is a person who will honestly perform his or her role as a contractor: see also Kioussis -v- Director General, Department of Fair Trading [2002] NSWADT 2 at paragraph 69, per Henessey DP. What fit and proper means must be viewed in the light of, "... the activities in which the person is or will be engaged": Re Percival and Australian Securities Commission (1993) 30 ALD 280, at 290. What is fit and proper will depend on the legislative context and the nature of the particular profession, trade or occupation in question: Re Brennand & Australian Casino Surveillance Authority (1995) 38 ALD 794, at 796 para [41]. 43 Given the conclusions of fact I have reached in respect of Mr Tomoski's involvement in the 2001 applications for contractor licences, I am not satisfied that they demonstrate a lack of honesty or integrity in his part. As discussed above they reflect on his gullibility, but that is not a reason for finding him not fit and proper. Past Breaches of the Home Building Act 1989 44 It is conceded by the Applicant that in the course of past development projects both Tomoski Developments and Mr Tomoski have engaged in what the Applicant described as a number of "technical breaches" of the Home Building Act 1989, which were unintentional. These are dealt with globally in the Applicant's submissions and are not specified. The Commissioner, on the other hand, argues that those breaches are entrenched, repeated and serious, and that Tomoski Developments and Mr Tomoski have been illegally operating as a builder for some years. It is submitted that they reflect on Mr Tomoski's honesty, integrity and ability, and therefore his fitness. 45 The evidence relating to these past activities can be conveniently categorised under two categories. That relating to past developments undertaken by Tomoski Developments of which there are three - Bowns Road, Kogarah, Illawara Street, Allawah and Andover Street, Allawah; and that relating to how Mr Tomoski views his role and how those with whom he deals see him. Past Activities – Illawara St, Allawah 46 This was a three story unit development undertaken by Tomoski Developments, which owned and developed the property. It was Tomoski Development's "first job". Mr Tomoski told the Tribunal that the company employed Michael Dadanzic as builder on the construction. Dadanzic was paid $1,500 a week plus extra payments when he was required to work on Saturdays or public holidays. In addition Dadanzic was to be paid a bonus of $25,000 if he completed the building for under $1,250,000. While initially there had been discussions about a formal building contract between Tomoski Developments and Dadanzic, this had not occurred and the construction had proceeded on a verbal arrangement. Mr Tomoski said that Dadanzic was on site all the time. 47 Mr Tomoski was cross-examined about his role in the construction. He said that he was on the site all the time. He was asked what role he played in supervising trades on the site. The following exchange took place between Mr Tomoski and Mr Grey (T59.10): Q. You were there how often? A. I was there full time with him. I mean this is my baby. It's my money here, my livelihood. Did you supervise other trades people? A. Did I? Q. Yes? A. When you say, "supervise" yeah I can only answer you see because that's a very loose word you're saying. I, Luke Tomoski, cannot supervise a tradesman unless the licensed builder says that's correct and after a period of time the licensed builder might - if I'm at that end of the building and I'm supervising someone he will see – if he thinks I don't know what I'm talking about he will say no because it's his licence. Q. Did you supervise anyone at any time on that job? A. Did I supervise? Q. Yes? A. Well, the answer is technically - the answer is yes and no. I mean if you're the builder and you're next to me here and I'm saying: I want the brick wall like this the builder says: No, we can't go past this height because engineering reasons. That's what the builder is there for. Q. But is that the way it worked on this particular site that he was with you all the time when you were talking to other trades? He wasn't there all the time, was he? A. Of course he was. 48 Mr Tomoski agreed that following discussion with Dadanzic he would organise tradesman to be present on site when needed. He was shown a series of Kogorah Council action inspection request form 1997 and 1998 relating to inspections of the building by the Council, all of which were in the name of Luke, and one of which (dated 16-9-98) was in the name of "Luke (bldr)". He agreed they referred to him. He was also shown a general and environmental infringement notice issued by the Council and addressed to him, relating to a failure to have sediment erosion control at the site. He said it should have been addressed to Dadanzic and that issuing the notice to him was a mistake. In any case, he was responsible for the payment of the fine under his arrangement with Michael. He explained his arrangement with Dadanzic thus (T62.59): … These are my babies. I want them to turn out first class. So then I have a different arrangement with the builder. I say, "I will pay you weekly. I will pay the bills." Are you with me? "You supervise the joint" okay, "Your licence, you supervise it but I will pay all the bills. I will take care of the headaches." These people know an experienced campaigner. I've been self-employed for a long time. They know I can handle all this paperwork and stuff that I've sent you down there, you know, the bills and et cetera, will handle some of the headaches. You just concentrate on the technicalities and that's what - and this way I pay a true value for what I order. If I wanted gold chimneys I'd put the gold chimneys. I don't have to argue with the builder. I'm paying. If I lose on this job I lose not them and that's the reason it's done by that because there's a certain quality I expect. It's too hard to put on a contract and that's the reason I operate the way I do. Now, I lose this way, okay? 49 When asked who would prevail, he or Dadanzic, if there was a disagreement about the quality of work he said that it was Dadanzic's job to make sure that the building complied with Australian Standards, but that if his standards are higher than the Australian Standard, he would prevail. If however, the work is not to Dadanzic's standard, Dadanzic prevails. 50 Mr Tomoski was referred to evidence he gave to ICAC that he had built the development. He described it as his work, but said he was not responsible for the structural side of the building. 51 With respect to insurance, Tomoski Developments at that time had in place an annual blanket home owners warranty insurance policy from HIA, which was in the name of Tomoski Developments as contractor, and commenced in November 1997. The application for that insurance was signed by Mr Tomoski and showed the "registered managers" as Michael Dadanzic a builder with 10 years experience, with his licence number, and Mr Tomoski a carpenter of 22 years experience without a licence number. When asked why a certificate of insurance was issued in the name of Tomoski Developments when Tomoski Developments did not have a licence, Mr Tomoski explained that this was the way his insurance broker had organised it. Mr Tomoski said he relied on his insurance broker, but knew that subsequent changes in the legislation required that the insurance be in the name of the builder. He could not understand why the insurance had been issued in Tomoski Development's name, if Tomoski Developments was not eligible to take out insurance, which it clearly was not. Past Activities – Andover St, Allawah 52 This was another multi-unit development in which the majority of work took place in 2000. On this site the builder was Johnny (Ercan) Osman, a long time associate of Mr Tomoski. Mr Tomoski said there was a verbal contract with Johnny Osman. He was not paid wages, but was renumerated "very handsomely" by participating in "joint ventures" and "partnerships" with Mr Tomoski. 53 Johnny Osman would come and go from the site, attending at least once a day. Mr Tomoski was on site constantly. If tradesmen wanted instruction or advice they would come to him. He organised the Council inspections. All the action inspection requests from the local council are in the name of "Luke" or "Like Tomovki". There are a series of certificates for work done or materials supplied, by contractors, such a weatherproofing, fire rating for gyprock which show the builder as Tomoski Developments. Structural engineering reports are in the name of Tomoski Developments. 54 It was put to Mr Tomoski that effectively he was the builder of the development. He explained (T70.53): With those certifications I'm paying all the bills. When I sell the property if the engineer misses one report I paid the council to inspect these things and I ring them because I want to make sure it gets inspected and is done properly because if one of those engineering slabs if I don't have certificate for it the bank doesn't give me any money to start with and even though if one of them is missing - if something is missed it's me that's up because I'm drawing down the money to pay for it. So I need every single one of them. I want to make sure this is ship shape a hundred per cent. I don't want something forgotten because I'm the one who's going to pay for the - I'm the one who's going to pay the price for the mistake. So what is wrong with me ringing them and making sure my paperwork is a hundred per cent? What's wrong with that? If something was wrong with one of those slabs Johnny Osman answers, comes back rectifies it. Johnny has seen them. He knows. He supervises the building but my name is involved there because I want to make sure every one of those certificates is there. It has to be for the bank like I said; for the councils; for strata and purposes, et cetera, et cetera. It's the process here and that's one of the jobs that I do that. That's how I try to keep the price down on the building and get the result that I want. 55 There is also a home owner's warranty insurance certificate which shows that the construction work on this property was carried out by Ercan Osman. Past Activities – Bowns Road, Kogarah 56 This is Tomoski Development's most recent development. Early in his evidence Mr Tomoski spent a considerable time telling the Tribunal about the importance of constructing the building so that it was in sympathy with the nearby, historic School of Arts. He described in detail the problems encountered in constructing the facia of the building in accordance with the architects specifications, and his role in designing a system of work by which the desired result could be achieved, supervising the renderers, and participating in the work. He was very proud of the achievement. 57 Mr Tomoski said that Johnny Osman was once again the builder on this site. He got paid out of real estate joint ventures. There was no written building agreement. Johnny Osman was not an employee. He explained (T73.02): … We offset with help. I help him get paid in a different way and he's happy to do that and, mate, it's just an understanding that will work perfectly. The buildings are faultless, his licence is there. He takes full responsibility for the licences. I think there's a letter saying so. Mr Tomoski agreed that when Johnny Osman acted as builder, he, Mr Tomoski, did not get paid for his work on site by Johnny Osman. 58 All the action inspection requests from the local council for this site are in the name of "Luke" or "Like Tomovki". The construction certificates are in the name of Tomoski Developments. There is a home owner's warranty insurance certificate which shows that the construction work on this property was carried out by Ercan Osman. 59 Cross-examination was also directed to work Mr Tomoski undertook for his friend Bill Panaopoulos in keeping an eye on a construction when Bill became ill. Mr Panaopoulos' sons, who Mr Tomoski said were licenced worked on the site. Mr Tomoski described his role as keeping an eye on things much as he did on his own sites. He was not paid for this. How Others View Mr Tomoski 60 The Commissioner also relied on a number of documents which Mr Tomoski had supplied in support of his initial applications. Among these was a statement of practical experience completed by Ray Vegner's, consulting engineer, in which he stated that Mr Tomoski was well known to him as a "builder and developer". The statement of practical experience completed by Victor Mansell, surveyor, refers to Mr Tomoski as a "builder/site foreman". The Commissioner also relied on the numerous action inspection reports in the name of Mr Tomoski. Breaches of the Home Building Act 1989. 61 The evidence as to the past conduct of Tomoski Developments, and of Mr Tomoski as a director and the controlling mind of the company, shows numerous breaches of both the spirit and the letter of the Home Building Act 1989 by both Tomoski Developments and Mr Tomoski. 62 First, it is clear on Mr Tomoski's own evidence that he supervised and co-ordinated building work at both Andover Street, Allawah and Bowns Road, Kogarah. His description of his role in supervising the facia work at Bowns Road is just one illustration of this. The evidence, however, points to him taking a significantly greater role: he co-ordinated trades, he dealt with the certifying authorities as builder, and instructed workers on the site. I accept that he deferred to the licenced builders on structural matters, but, on his own evidence, his was the prevailing opinion in respect of non-structural issues. The definition of building work in s.3 of the Act, however, is not limited to the structural aspects of construction. It says that building work includes any work involved in, or involved in co-ordinating or supervising any work involved in the construction of a dwelling. On his own evidence Mr Tomoski supervised the sites at Andover Street, Allawah and Bowns Road, Kogarah when Johnny Osman was not there. This is the work of a licenced builder. When he did that work, he did not do so as an employee of the builders, he did so as a director of Tomoski Developments, which was unlicenced (contrary to s. 12). 63 At one point in his evidence it was put to Mr Tomoski, in a global fashion, that he had given direction to workers on the sites. He denied this, saying he had not done so. This denial was plainly wrong, and cannot be reconciled with Mr Tomoski's own evidence: eg. his supervision of the facia work. 64 As do many directors of small companies, Mr Tomoski operates Tomoski Developments as an extension of himself. His is the controlling mind of the company. The evidence reveals that, via Mr Tomoski, Tomoski Developments has entered into at least three contracts for the construction of residential building work in breach the requirements of the Home Building Act 1989 that contracts be in writing and contain prescribed information. While not the holder of a licence Tomoski Developments has allowed Mr Tomoski to undertake building work while he himself was not licenced or qualified to do so (contrary to s 12 and 13). Further, no matter how one views Mr Tomoski's evidence concerning his financial relationship with Johnny Osman, it is clear that Johnny Osman could not be Tomoski Development's nominated supervisor because he was neither an employee, director or partner of Tomoski Developments in the development of Andover Street, Allawah and Bowns Road, Kogarah. 65 The argument put in the Applicant's submissions that Mr Tomoski should be viewed as the employee or Johnny Osman and Michael Dadanzic respectively, simply does not withstand analysis. Even accepting for the purpose of discussion the submission that to be an employee does not require payment, Mr Tomoski's own evidence is that he had the right to overrule the decisions of the builders on matters which were not structural. He could give them direction on all matters other than structural issues, with respect to which he bowed to their superior knowledge. This is not a relationship of employee and employer. 66 Michael Dadanzic, on Mr Tomoski's evidence alone, may have satisfied the requirement for a nominated supervisor on the Illawara Street development as he was paid a wage plus an incentive bonus. The principal difficulty with this is that Tomoski Developments was unlicenced in any case, and so could not undertake building work, even with a nominated supervisor. The fact that the insurance for this development was issued in Tomoski Development's name, even accepting Mr Tomoski's explanation for that, is extremely concerning, as the protection provided to purchasers of units from Tomoski Developments, an unlicenced builder, is to say the least problematical. 67 It is possible to find further breaches of the Home Building Act 1989 on the evidence, but I see little point in doing so. It is clear that the breaches are numerous. My view is that they reflect an ongoing method of business operation by Mr Tomoski, which, while consistent with his understanding of the regulatory regime, reflects a real ignorance of that regime on his part, and a minimal capacity to comply with it. 68 In saying that I wish to make it clear that Mr Tomoski impressed as a man with a clear eye for building detail, and a passion for delivering quality work. There was no suggestion on the evidence before me that the work undertaken by Tomoski Developments was other than of the high standard he claimed. It is a pity that he has not devoted the same attention to issues of compliance with the Home Building Act 1989. Is Mr Tomoski fit and proper in the light of the breaches 69 The issue to be determined is whether Mr. Tomoski is a fit and proper person. I have already discussed this requirement in the context of the 2001 applications. Importantly, the requirement of being fit and proper is normally said to involve honesty, knowledge and ability: Hughes & Vale v NSW (1955) 93 CLR 127, at 156 per Dixon CJ., Webb and McTiernan JJ. 70 In submissions the Applicant's Counsel wrote: "The applicant applies for a company contractor licence. This is to be distinguished from an individual contractor licence. An individual contractor or supervisor would need sufficient building knowledge and experience to be relied upon to build adequately. A company licence is substantially different. The company does not need building know-how or qualifications, as it engages a licenced builder for all building work. The requirements for being "fit and proper" are less than for an individual licence. The only real necessity for a company to be fit to hold a licence is that it can be relied on to ensure that proper steps are taken to comply with applicable laws. There is little else that a company can do." As the Commissioner correctly noted in submissions in reply, the requirement is not that the company engage a builder, but that it have a nominated supervisor in compliance with the Act and Regulation. 71 The submissions continued: "Not every builder knows the precise requirements of the Act. In Beijani [2004] NSWADT 262 , Mr. Montgomery, a Judicial Member of the Tribunal, quoted the reference in Bozicevic (Commercial Tribunal No. 134 of 1988) to the decision of Cripps DCJ in Bechara v Builders Licensing Board, District Court of NSW, unreported, 10 June 1980 : "... where His Honour Judge Cripps emphasised one aspect of the requirements as to knowledge when he said at page 6 that: "To be regarded as a fit and proper person under the Act requires, inter alia, in my opinion, that that person fully understand the provision of the Act and be prepared to observe its requirements. The view I have come to is that Mr. Bechara see no real need to comply with such provision and it is for this reason I am not satisfied he is a fit and proper person. and went on to say The Commercial Tribunal in Bozicevic added at p. 24: "The proposition that a builder should fully understand the provision of the Act might cause some difficulty to some Applicants for licences." However, the Judicial Member later pointed out that in the Appeal of Trevor James Pye DC (NSW) 19 August 1976 (unreported) ... Head J. held that even in circumstances that past conduct might put a person under a cloud that there is a doubt that he/she is a fit and proper that: "the Court is concerned more with an assessment of whether the disrespect of the law (by the person before it) in the past is likely to influence their actions in the future. The critical question is whether the person's past is going to put their future under such suspicion that the law should take no chances. If that situation is not applicable the previous convictions are not an absolute bar to the issue of the licence to such persons." Whether a person is "fit and proper" to hold a particular licence depends upon whether or not they can be regarded as reliably carry out the responsibilities of holding such a licence. The factors will depend on the type of licence and the nature of the duties and responsibilities a holder must carry out. Even past convictions or breaches of the law are not of themselves sufficient to determine that a person is not fit to hold a licence. What is important is what any past conduct might indicate about a prospective licencee's future conduct. Recognising, as the Judicial Member did in Beijani, that failure to know all of the provisions of the Act should not. This case is different from cases of licenced builders habitually and intentionally failing to comply with requirements. In Bozicevic, it was found that an applicant had "scant regard" for licensing provisions. In Bechara, it was found that an applicant saw "no real need to comply" with relevant provisions. Kioussis was a similar case in which it was found that an applicant did not intend to comply with licensing provisions. However, in the present case, Mr. Tomoski is alleged to have committed breaches when: - he was not a licencee, and had not considered becoming one; - he engaged a licenced builder to, amongst other things, comply with the HBA; - compliance with the HBA was not his responsibility, but that of his paid contractor; - it is not alleged that he knew of any breaches of the HBA. The question is whether or not a licencee is likely to comply with requirements in the future." 72 In Beijani Judicial Member Montgomery was concerned with the findings of ICAC and allegations of previous breaches of the Home Building Act 1989 with respect to the issue of a plumbers licence. Having reviewed the authorities he said (at 118): "118 The unquestioned principle from the abovementioned decisions in determining whether a person is a "fit and proper person" to be issued a licence for a particular activity, is that past improper conduct of the applicant must be considered in light of the activity which is to be licensed and not considered at large." 73 In this case the issue is whether Tomoski Developments should be issued with a corporate contractor licence. It is clear that if a licence is issued Tomoski Developments will be involved in substantial and ongoing residential property developments, as it has been in the past. The Commissioner says that Mr Tomoski as a director of Tomoski Developments is not a fit and proper person and that therefore the decision to refuse Tomoski Development's application should be affirmed. 74 I have already indicated that while I have some reservation in respect to Mr Tomoski's explanation of the earlier submission of a licence application supported by false documents, I am not satisfied that the circumstances demonstrate a lack of honesty or integrity in his part. The past breaches of the Home Building Act 1989, however, are a different matter. 75 It is clear that Mr Tomoski has been involved in a series of repeated breaches of the regulatory regime, which show that he has a very poor understanding of the regulatory requirements and little knowledge of law as it applies to work he undertakes. In submissions, Mr Perrignon argued that the past breaches were made in ignorance of the law, and should not be held against him. He submitted that as a result of Mr Tomoski's experience going through the Tribunal processes, he had learned his lesson and that his character should not be viewed in the light of past breaches. He submitted that the breaches were technical. 76 My analysis of Mr Tomoski's evidence to the Tribunal gives me no confidence that Mr Tomoski now has any real understanding of the regulatory regime. Except for an understanding that the builder has to be insured, he appeared to show no understanding of the ramifications of the issues about which he was questioned, to Tomoski Development's operations. I have no confidence that he now understands what is involved in having a nominated supervisor, or in contracting with a builder to construct a residential development. I have no confidence that he has any understanding of the role of a nominated supervisor. He showed no sign of understanding the potentially very serious consequences to purchasers of units built by Tomoski Developments in Illawara Street, Allawah of having insurance in the name of an unlicenced builder: a breach that under no circumstances could be described as "technical". His past conduct in ignoring the requirements of the Act, even accepting that this arose from ignorance, leaves me concerned as to whether that will change. There is nothing, apart from the change in insurance arrangements, in the evidence to suggest that Mr Tomoski ever sought to gain an understanding of what the regulatory regime involves, or to modify his business practices. His engaging Tony Sassine because he could not work the requirements for a contractor licence out, or deal with DFT, illustrates this. His evidence to the Tribunal did not demonstrate any real understanding of his obligations. 77 As I have already alluded to, being fit and proper involves more than honesty and integrity, it involves knowledge and ability. At this point in time, I am not satisfied that Mr Tomoski has the requisite knowledge and ability. I am not satisfied that as a director of Tomoski Developments he, or it, can be relied on to ensure that proper steps are taken to comply with applicable laws. I am not satisfied that Mr Tomoski presently has the knowledge or ability to carry out the responsibilities of a director of a corporation which holds a contractor licence. 78 Having reached that conclusion it is not strictly necessary to consider the third issue, whether Tomoski Developments, if granted a contractor licence, intends to employ a qualified supervisor in compliance with the requirements of the Act and the Home Building Regulation 2004. 79 The decision of the Commissioner to refuse Tomoski Developments Pty Ltd's application for a contractor licence 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.