Massoud v Commissioner for Fair Trading [2006] NSWADT 59

CITATION: Massoud v Commissioner for Fair Trading [2006] NSWADT 59

DIVISION: General Division

APPLICANT PARTIES: Nahi Massoud RESPONDENT Commissioner for Fair Trading

FILE NUMBER: 053381

HEARING DATES: 23/02/2006

SUBMISSIONS CLOSED: 02/23/2006

DATE OF DECISION: 03/01/2006

BEFORE: Handley R - Judicial Member

CATCHWORDS: Home Builder - issue of contractor licence - Home Building Act - home builder - issue of contractor licence

MATTER FOR DECISION: Principal matter

LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Home Building Act 1989

CASES CITED: Gales Holdings Pty Ltd v Tweed Shire Council (No 2) [2006] NSWADT 41

APPLICANT R O'Neill, Barrister REPRESENTATION: RESPONDENT V Griswold, Solicitor

ORDERS: 1. The decision under review is affirmed; 2. The Respondent's application for costs is refused

REASONS FOR DECISION 1 This matter involves an application by Mr Nahi Massoud for review of a decision of the Commissioner for Fair Trading ('the Commissioner') to refuse Mr Massoud's application to renew his individual contractor licence on the ground that Mr Massoud is not a fit and proper person to hold a contractor licence. The Facts 2 Mr Massoud was born on 26 May 1965 and is aged 40. He is married with a two year old child. Mr Massoud left school in 1982 and, initially, worked with his brothers installing office partitioning. In 1988, he obtained a TAFE Certificate in Building, and in 1997 he applied for and was granted an individual contractor licence. 3 In December 1998, at the request of his cousin Gehad Massoud ('Gehad'), Mr Massoud signed a false Statement of Practical Experience (Building Trade Work Reference) supporting an application by Awtel Maroun for an individual contractor licence. Mr Massoud did so knowing nothing of Mr Maroun and was aware he was making a false statement. 4 In January 2002, also at the request of his cousin Gehad, Mr Massoud completed and signed a false Statement of Practical Experience (Building Trade Work Reference) supporting an application by Mark Van Nguyen for an individual contractor licence. Mr Massoud did so knowing nothing of Mr Nguyen and was again aware he was making a false statement. 5 During 2004 and 2005, the Independent Commission Against Corruption ('ICAC') carried out an investigation of persons who had obtained building licences unlawfully from the NSW Office of Fair Trading. Mr Massoud was identified as having provided false Statements of Practical Experience in respect of Mr Maroun and Mr Nguyen. Mr Massoud co-operated in providing information to ICAC, including agreeing to give evidence at an ICAC hearing. However, ultimately, he was not called to give evidence. 6 On 3 June 2005, Mr Massoud applied for the renewal of his individual contractor licence, which had expired on 2 June 2005. On 15 July 2005, Mr Massoud attended the offices of the Home Building Service at Parramatta where he was interviewed by its principal investigator in relation to the application for renewal of his licence. In the course of the interview, Mr Massoud admitted that he had made false statements in relation to applications by Mr Maroun and Mr Nguyen for individual contractor licences, without knowing either of them or whether they had qualifications or experience in the building industry. 7 On 11 August 2005, a delegate of the Commissioner refused Mr Massoud's application on the ground that he is not a fit and proper person to hold such a licence. On 7 October 2005, a different delegate confirmed this decision after an internal review. On 2 November 2005, Mr Massoud lodged an application for review of this decision by the Tribunal. Since the refusal to renew his licence, Mr Massoud has been working as a subcontractor at an hourly rate. Evidence 8 The material facts are not in dispute. Mr Massoud gave oral evidence at the hearing that his cousin Gehad, to whom he was reasonably close at the time, had asked him to help with obtaining licences for Mr Maroun and Mr Nguyen. Gehad had done Mr Massoud some favours and Mr Massoud felt he should help him. Mr Massoud trusted his cousin and assumed these were people who worked with him. He acknowledged that he had never met either Mr Maroun or Mr Nguyen and knew nothing of them; he was aware that he was making false statements. Mr Massoud realises he was naive and stupid in trusting his cousin, and he should have queried Gehad about his request. In respect of Mr Maroun, Mr Massoud signed a Statement of Practical Experience that had already been filled out by Gehad. In respect of Mr Nguyen, Mr Massoud completed the Statement in his own writing but Gehad told him the words to use in the reference. In cross-examination, Mr Massoud agreed that in the period from January 1994 to August 1997, when he stated he had employed Mr Nguyen, he did not himself have a licence. 9 Mr Massoud said he did not receive any money for completing the false references and these are the only false references he has ever given. He did not know his cousin was receiving money for assisting with the applications. Mr Massoud said he co-operated with ICAC in its investigation and told the principal investigator of the Home Building Service the whole truth when interviewed. The Issue 10 The issue for the Tribunal is whether Mr Massoud is a fit and proper person to hold a contractor licence. Section 40(1)(a) of the Home Building Act 1989 ('the 1989 Act') provides that the Commissioner must reject an application for renewal or restoration of an authority if "not satisfied that the applicant is a fit and proper person to hold the authority". Section 40(1A) states that in determining whether an applicant is a fit and proper person to hold an authority, the Commissioner "is to consider whether the applicant is of good repute, having regard to character, honesty and integrity". Submissions 11 Ms Griswold, for the Commissioner, noted that Mr Massoud had admitted to dishonest conduct in fabricating and signing false documents to support applications by Mr Maroun and Mr Nguyen for individual contractor licences. She submitted that his dishonest behaviour, on two occasions, was sufficient to warrant the refusal of his application for a licence. 12 Ms Griswold provided additional documents detailing defective work undertaken by Mr Maroun, against whom a formal complaint of unfinished work, and defective or substandard work has been made, and in respect of which a notice of claim has been lodged against the home warranty insurance. These additional documents were provided to illustrate the far-reaching ramifications of the false representations made by Mr Massoud and the detriment to consumers and the public at large caused by his fraudulent behaviour. She submitted that Mr Massoud's interest in renewing his licence cannot be considered to outweigh the community's interest and confidence in the trustworthiness of home building industry personnel. 13 Mr O'Neill, for Mr Massoud, acknowledged that this matter involves serious misconduct, and said Mr Massoud realises he should not have signed the false statements. However, in each case, the statement signed by Mr Massoud was one of only four documents accompanying the application. The total consequences of the false applications should not be attributed to Mr Massoud – to do so would be an over-reaction. Indeed, in the case of Mr Maroun, his licence must presumably have been renewed annually until it was cancelled in April 2005 when the falsehood was discovered. 14 Mr O'Neill said Mr Massoud has co-operated with the Commissioner in acknowledging his misconduct and providing information. There is also no suggestion that any work undertaken by Mr Massoud is defective. In the circumstances, the refusal of a licence is too severe a penalty for Mr Massoud's misconduct: a more appropriate penalty would be the suspension of his licence, for example for a period of 12 months. Is Mr Massoud a 'fit and proper person'? 15 Mr Massoud acknowledges that he made false statements in relation to applications for contractor licences by Mr Maroun and Mr Nguyen. He gave references for them at the request of his cousin Gehad to support their applications without knowing them or knowing anything about them. In the case of Mr Maroun, Mr Massoud certified that he had known him for a period of two years and nine months during which Mr Maroun carried out a range of specified work. Mr Massoud's reference concluded with the comment: "Awtel is professional in everything he does. He has no problem completing tasks given to him in under the estimated time period. He works well with a team and is admired by all on site. He has great managerial skills as well as practical skills. The building industry needs more builders like him." 16 In the case of Mr Nguyen, Mr Massoud certified that Mr Nguyen had worked for him during the period January 1994 to August 1997, a period when Mr Massoud did not himself hold a licence. Mr Massoud listed the type of work Mr Nguyen had undertaken for him and concluded his reference with the following comment: "Mark always displayed a high degree of professionalism in his work. He is capable, responsible and self motivated. He's honest & totally trustworthy & I have no hesitation in recommending him for any position he seeks." 17 These false statements constitute serious misconduct involving dishonesty. I note that Mr Massoud provided the statements at the request of his cousin, trusting him, and received no payment for doing so. I also note his acknowledgement that he was naive and stupid, and his remorse. However, the fact that Mr Massoud did not, at the time, think through the consequences of his action is, in my view, no excuse. This is a situation where the legislation and, in particular, the provisions relating to the processing of licence applications, is clearly intended to protect consumers and more generally the public. Mr Massoud's dishonesty is a serious matter that is directly referable to his character, honesty and integrity (s 40(1A). In my view, the Commissioner's delegates were justified in finding that Mr Massoud was not of good repute and not a fit and proper person to hold a licence. Thus, the decision under review should be affirmed. 18 I should note concern that the reasons given by the delegates of the Commissioner for their decisions make no reference to s 40(1A) of the 1989 Act. This subsection requires the Commissioner, in determining whether an applicant is a fit and proper person to hold a licence, to consider the broader question of whether Mr Massoud is of good repute, having regard to character, honesty and integrity. The statements of reasons make no reference to this. Nevertheless, for the reasons stated above, had the delegates done so, the evidence of dishonesty was sufficient to justify a finding that Mr Massoud was not of good repute. There is therefore no basis for changing the decision made. 19 I was impressed both by Mr Massoud's frank and forthright admissions of misconduct in giving evidence at the hearing, and by the other evidence in relation to his co-operation with the Commissioner's investigation and the ICAC inquiry. Apart from the misconduct that is the focus of these proceedings, I note there is no other evidence to suggest that he is not a fit and proper to hold a licence. Thus, although his dishonesty is a serious matter, it may be that within a relatively short period and with further evidence, he will be able to satisfy the Commissioner of his rehabilitation and that for the future, he is a fit and proper person to whom a licence may be granted. Costs 20 Ms Griswold seeks an order for the Commissioner's costs, contending that there were no reasonable prospects of success for Mr Massoud's application since he is clearly not a fit and proper person to hold a licence. Moreover, the Tribunal "has an opportunity to send a message to the applicant that this frivolous application is a waste of the Tribunal's resources and time". 21 Mr O'Neill rejects these submissions. He submits Mr Massoud was exercising a statutory right to seek a review of the decision to refuse his licence, and there is no basis on which to make a finding of "special circumstances" that would warrant a costs order pursuant to s 88 of the Administrative Decisions Tribunal Act 1997. In particular, Mr O'Neill submitted there is nothing similar to the examples of special circumstances referred to in the Tribunal's Practice Note No 12. 22 The Tribunal may only order costs pursuant to s 88 of the Administrative Decisions Tribunal Act 1997 if "satisfied that there are special circumstances warranting an award of costs". The Tribunal has provided guidance to parties on the relevant law and practice in relation to costs in Practice Note No 12. Normally, parties to proceedings before the Tribunal should bear their own costs, and the discretion to award costs is not exercised lightly. Mr O'Neill referred to the recent Tribunal decision in Gales Holdings Pty Ltd v Tweed Shire Council (No 2) [2006] NSWADT 41, where the Judicial Member reviewed the principles governing costs, including examples set out in the Practice Note. Most of these examples relate to a party's conduct of proceedings, but if a party's claim is untenable in fact or law that may also justify a costs order. However, mere success in tribunal proceedings does not constitute special circumstances. 23 Ms Griswold has not pointed to any deficit in or been critical of the conduct of Mr Massoud's case in these proceedings. She relies entirely on his having no reasonable prospect of success and contends this was a "frivolous application". I disagree. As Mr O'Neill pointed out, Mr Massoud has a statutory right to seek a review of the decision to refuse his licence. I am not satisfied that there was anything frivolous about his application and I do not agree that the submissions made on Mr Massoud's behalf were untenable. I therefore refuse the application for costs. Decision 24 The decision under review is affirmed. The application for costs is refused.