Awadallah v Commissioner for Fair Trading [2006] NSWADT 60

Set aside by Appeal : Order No 1 made by the Tribunal on 1 March 2006 is set aside and the following order substituted: 'The Tribunal has no jurisdiction to hear and determine the Applicant's application for review."

CITATION: Awadallah v Commissioner for Fair Trading [2006] NSWADT 60

DIVISION: General Division

APPLICANT PARTIES: Ramses Awadallah RESPONDENT Commissioner for Fair Trading

FILE NUMBER: 063039

HEARING DATES: 22/02/2006

SUBMISSIONS CLOSED: 02/22/2006

DATE OF DECISION: 03/01/2006

BEFORE: Higgins S - Judicial Member

CATCHWORDS: Home Building Act - home builder - cancellation of supervisor or registration certificate - Home Builder - cancellation of supervisor or registration certificate

MATTER FOR DECISION: Preliminary matter

Administrative Decisions Tribunal Act 1997 Administrative Decisions Tribunal Legislation Amendment Act 1998 LEGISLATION CITED : Building Services Corporation Act 1989 Home Building Act 1989 Home Building Regulation 1997 Interpretation Act 1987

APPLICANT G Coyne, Solicitor REPRESENTATION: RESPONDENT V Griswold, Solicitor

ORDERS: 1.The Tribunal has jurisdiction to hear and determine the applicant's application for review; 2.The matter set down for further hearing on 3 March 2006 at 10a.m. in respect to the applicant's application for an extension of time and interim order application

REASONS FOR DECISION Introduction 1 The applicant, Ramses Awadallah, has lodged an application seeking review of a decision of a delegate for the Commissioner of Fair Trading ("the respondent") to cancel his qualified supervisor certificate. That decision was made on 25 November 2005, and the applicant lodged an application for review of that decision, together with an application for urgent stay of the decision, on 3 February 2006. When the applicant's stay application came before the Tribunal for hearing on 9 February 2006, the respondent contended that the Tribunal had no jurisdiction to hear the applicant's application as the decision for which review was sought was not a decision that was reviewable by the Tribunal. It was also noted that in the event the respondent's contention was incorrect, the applicant's application for review had been lodged outside the time prescribed under the Administrative Decisions Tribunal Act 1997 ("ADT Act"). In light of this, the question of whether the Tribunal had jurisdiction to hear and determine the applicant's application, including the stay application, was adjourned to 22 February 2006. At the same time the applicant's application for an interim order and for an order extending the time within which to lodge the review application was adjourned to the same date. 2 On 22 February 2006, the Tribunal heard short arguments from the legal representatives of the parties in respect to the question of jurisdiction as the parties agreed that this issue should be determined prior to the Tribunal hearing argument on the applicant's application for an extension of time and an order for a stay. What follows is the Tribunal's determination and reasons for decision in respect of the jurisdiction issue. Evidence 3 The only documentary material before the Tribunal, which sets out the factual basis on which the jurisdiction issue arises are the applicant's application for review and his application for an urgent stay of the decision the subject of the review application. In the application for an urgent stay the applicant said that he was: "… the Director and Licence Holder for his company Aristocrat Swimming Pools Pty Limited which trades in the area of supply and installation of swimming pools and spas. The company is unable to trade without a Supervisor's Licence. …" 4 In his application for review, the applicant said the following: "The Department has cancelled the Applicant's Qualified Supervisor Certificate 24394S and Contractor's Licence 173052C pursuant to the Home Building Act 1989 on the basis that the Applicant is not a fit and proper person to hold the Contractor's Licence and otherwise of good character. The reason given for such cancellation is that the Applicant has falsely declared the truth of information contained within the application for such licence." 5 Attached to the applicant's application for review was a copy of the respondent's Notice of Cancellation ("the Notice"). That Notice is addressed to the applicant and headed: " Notice of Cancellation of Qualified Supervisor Certificate 24394S ". 6 Although the Notice is headed as being a cancellation of the applicant's qualified supervisor certificate, the body of the Notice makes no reference to that certificate. Instead, it refers to a "Contractor Licence 173052C" that was allegedly issued to the applicant on 9 June 2005 under the HB Act. The body of the Notice then goes on to state the following: "It being noted on the application form for a contractor that you signed on 25 January 2005, that you answered 'NO' to the question 'Have you in the last 3 years been bankrupt or assigned their property to pay debts or ever been a director or manager of a company which was subject to a winding up order, placed in receivership or administration, or under official management, had a controller appointed or entered into other arrangements with creditors due to insolvency". A search of the records of the Australian Securities and Investment Commission shows that: [details omitted] [details omitted] [details omitted] [details omitted] You did not disclose in your application for a licence that in the last three years you were a director of two companies which were subject to a winding up order, placed in receivership or administration, or under official management, had a controller appointed or entered into other arrangements with creditors due to insolvency. At the time your individual licence was issued, Clause 25(1)(a)(iv) of the Home Building Regulation 2004 specified that, before a licence is issued, the Commissioner must be satisfied that any individual who is an applicant is a fit and proper person to hold the contractor licence and is otherwise of good character. By not disclosing on your application form that you were a director of two companies which were voluntarily winding up within the last three years, you have demonstrated that you are not a fit and proper person to hold a contract of licence. Contractor licence 173052C was issued in error as you are not a fit and proper person to hold a contractor licence. Section 43(1)(b) of the Home Building Act 1989 provides that the Commissioner may, by serving on the holder of the authority a written notice setting out the reasons for the cancellation, cancelling authority if the authority was issued in error. As a delegate of the Commissioner, I hereby notify you that your contractor licence 173052C has been cancelled effective 25 November 2005. …" 7 The respondent's Notice would appear to be seriously deficient. It is the Tribunal's understanding that the applicant's company is the holder of a contractor licence issued under the HB Act and it is this company that is authorised to enter into home building contracts. It is also the Tribunal's understanding that subsequent to the applicant's company being issued with this licence, the applicant applied for and was issued with a qualified supervisor certificate and that it is this certificate that the respondent has purported to cancel, but the contractor licence which was issued to the applicant's company has not been cancelled. What is not clear is whether "Contractor licence 173052C" is the licence issued to the applicant's company and whether the applicant's qualified supervisor certificate was cancelled on the basis of alleged disclosure failures in the application for the company's contractor licence or the application for the qualified supervisor certificate or both. 8 While the Tribunal draws these matters to the attention of the parties, it has proceeded to determine the jurisdictional issue on the basis argued by the parties in that the respondent's Notice to the applicant is a notice of cancellation of the applicant's qualified supervisor certificate and that the cancellation was made pursuant to s.43(1)(b) of the HB Act. Relevant legislation 9 Conferral of jurisdiction to the Tribunal to review an administrative decision is set out in s.38 of the ADT Act. That section, so far as is relevant, provides as follows: "38(1) The Tribunal has jurisdiction under an enactment to review a decision (or a class of decision) if the enactment provides that applications may be made to it for a review of any such decision (or class of decisions) made by an administrator: (a) in the exercise of functions conferred or imposed by or under the enactment, or (b) in the exercise of any other functions of the administrator identified by the enactment." 10 In relation to "a reviewable decision", the term "enactment" is defined in s.5 of the ADT Act to include an Act, other than the ADT Act or a statutory rule other than a statutory rule made under the ADT Act. Accordingly, the Tribunal's jurisdiction to review an administrative decision must be found in an Act or Regulation other than the ADT Act or its regulations. 11 In respect of administrative decisions made pursuant to the HB Act, those which are reviewable by the Tribunal are set out in s.83B of that Act. That section, so far as is relevant, provides as follows: "83B(1)An applicant for the issue or alteration of an authority aggrieved by any decision of the Director-General relating to the application may apply to the Tribunal for a review of the decision. (2) The holder of an authority aggrieved by any decision of the Director-General to alter an authority or to cancel a provisional authority may apply to the Tribunal for a review of the decision. (2A) The holder of a contractor licence aggrieved by a decision of the Director-General to suspend the contractor licence under section 22A or 22B may apply to the Tribunal for a review of the decision. (3) A person aggrieved: (a) by a decision made by the Director-General under Part 4 (Disciplinary proceedings) to impose a penalty or to cancel or suspend a contractor licence, or (b) by any other decision made by the Director-General under that part that is prescribed by the regulations, may apply to the Tribunal for a review of that decision. (4) For the purposes of this section, the Director-General is taken to have refused any application that has not been withdrawn if the Director-General has not served on the applicant notice of the decision on the application: (a) within 40 days of it being lodged at the office of the Department of Fair Trading, or (b) if the Director-General and the applicant agree on a longer period – within the longer period after its being so lodged." 12 The term "authority" is defined in s.83A of the HB Act to mean a contractor licence, a supervisor or tradesperson certificate, owner-builder permit and a building consultancy licence. 13 As mentioned above, the section under which the decision to cancel the applicant's qualified supervisor certificate was made pursuant to s.43 of the HB Act. That section provides as follows: "43(1) The Director-General may, by serving on the holder of the authority a written notice setting out the reasons for the cancellation, cancelling an authority if: (a) the authority was issued, renewed or restored because of a misrepresentation (whether fraudulent or not), or (b) the authority was issued, renewed or restored in error (whether as a result of such a misrepresentation or not). (2) The Director-General may, by a further notice served on the holder of an authority cancel under this section, retrospectively restore the authority if the Director-General is satisfied: (a) that the error concerned has been rectified, and (b) that the holder acted in good faith." 14 Section 43 of the HB Act is contained in Division 4 of Part 3 of that Act. This Part deals with the issuing of licences, certificates and permits and for the purposes of Division 4 the term "authority" is defined in s.33 to mean the same as that contained in s.83A. That is, it also includes a contractor licence and a supervisor certificate. Respondent's contention 15 The respondent contended that on a proper construction of s.83B of the HB Act, the Tribunal has no jurisdiction to review a decision that is made pursuant to s.43(1)(b) of the HB Act. It was further contended that on the basis of s.83(2) expressly giving the Tribunal jurisdiction to review a decision to cancel a "provisional authority" this evidenced an intention by Parliament to deliberately exclude from the Tribunal's jurisdiction decisions that were made under s.43. 16 Ms Griswold, who appeared on behalf of the respondent, conceded that had the applicant's application for a qualified supervisors certificate been refused on the basis of the applicant's alleged disclosure failures the Tribunal would have jurisdiction to review the decision of refusal. She also conceded that the respondent could have dealt with the applicant's alleged disclosure failures under the disciplinary proceedings of Part 4 of the HB Act and that any decision made pursuant to those proceedings was also reviewable by the Tribunal. However, she contended, decisions made under s.43 of the HB Act stood apart from these as an authority issued in error needed to be dealt with quickly as did those applications which were issued on the basis of false and misleading disclosures in applications for an authority. 17 Ms Griswold also contended that the applicant's remedy lay in the applicant making a new application for a qualified supervisor certificate, which would be considered on its merits by the respondent and in the event the respondent refused that application the applicant would have all the usual external review rights as set out in s.83(1) of the HB Act. Applicant's contention 18 Mr Coyne, on behalf of the applicant, on the other hand contended that s.83B, in particular s.83B(1) of the HB Act, should be given a very broad interpretation. In this regard he contended that the respondent's decision pursuant to s.43 was a decision in respect of an application for the "issue" of an authority. 19 Mr Coyne, also submitted that when s.83B is considered as a whole and in the context of the licensing provisions generally, this evidenced a clear intention by Parliament that any decision made by the respondent in respect to the issue, alteration, suspension and cancellation of an authority is to be reviewable by the Tribunal. Consideration 20 In my opinion, the respondent has adopted a very narrow and literal approach to the construction of s.83B of the HB Act, which is contrary to the approach set out in s.33 of the Interpretation Act 1987. That section provides as follows: "In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object." 21 The HB Act is complex, but its overall objective is to regulate home building within New South Wales so as to protect the interests of consumers. One of the means of achieving this is through requiring those who wish to contract with consumers to build a residential dwelling or part thereof, a kit home, or a swimming pool to be licensed and insured. In addition, to this there is a requirement that those who wish to undertake specialist work (e.g. electrical or plumbing work) or any other work that is residential building work etc. must also be licensed. The relevant licensing provisions are set out in Part 3 of the HB Act. In this Part, Division 1 deals with contractor licences and Division 2 deals with supervision or tradespersons certificates. The difference between these licences is that the contractor licence authorises the holder to contract with a consumer to undertake home building work, whereas a supervision certificate does not permit the holder to contract with a consumer to undertake such work, it only enables the holder of the certificate to undertake such work. In the case of an individual who is the holder of a contractor licence, that licence may also enable the individual to do or supervise the actual work the subject of the contract. However, where the holder of a contract licence is a corporation or a partnership, then the corporation or partnership it must at all times have a nominated person who is the holder of a supervision certificate to undertake responsibility of the work that they have contracted for. 22 In addition to contractor licences and supervision or tradesperson certificates, Part 3 of the HB Act makes provision for owner-builder permits (see Division 3) and building consultancy licences (see Division 3A). 23 In Division 1 and 3A, provision is made for the mandatory cancellation of a contractor licence and a building consultancy licence (see ss.22 and 32D of the HB Act and cl.30 of the Home Building Regulation 1997), in specified circumstances. These circumstances include circumstances in which the holder of such a licence becomes bankrupt or is placed into liquidation. 24 Division 4 of Part 3 contains provisions that relate generally to each of the licences, certificates and permits contained in Divisions 2, 3 and 3A of that Part. These licences, certificates and permits are described generally in Division 4 as being an "authority": see s.33 of the HB Act, which is in the same terms as that contained in s83A. Section 38, which is also contained in Division 4 makes provision for the issue of a "provisional authority" where the applicant for an authority does not meet the prescribed requirements of the authority applied for and where the respondent considers that there are special circumstances warranting the issue of a qualified authority. Sub-section 38(4) gives the respondent the power to cancel a qualified authority at any time. 25 Section 43 is also contained in Division 4 of Part 3 of the HB Act and as pointed out above applies equally to a contractor licence issued in accordance with the provisions in Division 1, a supervisor certificate issued in accordance with the provisions in Division 2, a owner-builder permit issued in accordance with the provisions in Division 3, a building consultancy licence issued in accordance with the provisions in Division 3A and a "provisional" licence or authority issued under s.38 of the HB Act. 26 Part 4 of the HB Act relates to disciplinary proceedings that the respondent is able to take against the holder of a contractor licence, a supervisor certificate or any of the other authorities mentioned above. The grounds on which such action can be taken varies for the various types of licence, but common to all are the following: a) the holder is no longer entitled to the licence he/she holds: see ss.56(a), 56A(a) and 57(a) of the HB Act; b) the holder is not fit to hold the licence he/she holds: see ss.56(b), 56A(b) and 57(b) of the HB Act; and c) the holder is guilty of improper conduct: see ss.56(c), 56A(c) and 57(c) of the HB Act. Improper conduct for the various licences is defined in ss.51 to 54. 27 If disciplinary action is to be taken by the respondent he is required to issue a notice to show cause to the licence holder: see s.61 of the HB Act. And the disciplinary action the respondent is entitled to take is that set out in s.62 of the HB Act. This includes cancelling the licence of the person the subject of the disciplinary action: see s.62(f). 28 Part 4A of the HB Act sets out those decisions of the respondent made pursuant to the HB Act that are reviewable by the Tribunal. That Part was inserted into the Act in 1998 by the Administrative Decisions Tribunal Legislation Amendment Act 1998. However, prior to the insertion of this Part, similar provisions were contained in Part 5 of the Act (including the Act as it was previously known, namely the Building Services Corporation Act 1989), which gave applicants for, or a holder of a licence, certificate or permit a right of appeal to the Commercial Tribunal if aggrieved by a decision of the respondent in respect of the licence, certificate or permit ("an authority"). 29 As pointed out above, any decision of the respondent made pursuant to the disciplinary proceedings under Part 4 of the HB Act (i.e. s.62) is expressly reviewable by the Tribunal: see s.83B(3). Similarly, a decision of the respondent in respect to the issue of an authority is expressly reviewable (see s.83B(1)) as is a decision by the respondent to suspend a contractor licence under s.22A and 22B of the HB Act. Decisions pursuant to the latter sections can only be made where the respondent is of the opinion that the licence holder has failed to comply with the insurance requirements in Part 6 of the HB Act or where a controller or administrator has been appointed to manage the affairs of the licence holder. These sections make provision for the licence holder to provide information to the respondent and they also provide for the revocation of the suspension on the provision of the requisite documentation. 30 On the other hand, a decision to cancel a contractor licence and a building consultancy licence under ss.22 or 32D of the HB Act is not expressly made reviewable under s.83B of that Act. The reasons for this appear to be obvious as cancellation is based on the licence holder being insolvent either through bankruptcy or liquidation. Both sections also provide for cancellation where the licence holder is a partnership and there has been a change of membership of that partnership, without the approval of the respondent. Again the reason for excluding such a decision from external review would appear to be obvious as licences are issued on the basis of the fitness and propriety of the various members of the partnership who had applied for the licence and the fact that these members had not in recent years been insolvent or been a director of a company that had become insolvent in recent years. 31 A decision by the respondent to cancel a provisional authority is also expressly reviewable by the Tribunal under s.83B(2) of the HB Act. Although the respondent has power to make such a decision under s.38(4) of the Act, the express words of s.83B(2) do not limit review to decisions made under that sub-section. It may therefore be arguable that a decision to cancel a provisional licence under ss.22, 32D and 43 would also be reviewable by reason of s.83B(2). In my opinion, that is not the intention of s.83B(2). What is intended to be reviewable is a decision made under s.38(4). The respondent has been given a very wide discretion in that section, which under general principles would be reviewable. On the other hand, to construe s.83B(2) to include a decision to cancel a provisional licence under ss.22 and 32D would give rise to a perverse result. That is, a provisional licence holder who is bankrupt or insolvent would have more external review rights than a full licence holder. For the same reasons, in my opinion, s.83B(2) does not relate to a decision to cancel a provisional licence under s.43. 32 However, in my opinion, this does not mean that on its proper construction, a decision under s.43 is not reviewable under s.83B. In this regard, in my opinion, the construction contended for by the applicant is correct. Although the heading of s.43 refers to "cancellation because of fraud etc" the section is solely concerned about an authority having been issued, renewed or restored as a result of a misrepresentation, regardless of intent, or as a result of an error. That is, even though a decision under this section is a decision to cancel an authority, it is also a decision that "relates to the application" for that authority and is therefore a decision coming within s.83B(1) of the HB Act. It is noted that similar to ss. 22A and 22B, after a decision has been made under that section, the respondent has power to revoke that decision and restore the authority. 33 In my opinion, this construction of s.83B(1) is consistent with the overall objectives of Part 4A of the HB Act. Nor is the respondent disadvantaged or the protection of consumers compromised. In making a decision under s.43, unlike the requirements of Part 4, the respondent is not required to issue a show cause notice prior to issuing a notice of cancellation. Once that notice has been issued the authority to which it relates is cancelled. There is no delay in this process of cancellation, a decision, which will be effective subject to the authority holder successfully seeking external review of the decision by the Tribunal. In essence this is entirely consistent with the respondent's contentions, but far less complex. 34 Accordingly, for the reasons set out above, the Tribunal finds that it does have jurisdiction to hear and determine the applicant's application, including his application for an interim order. On this basis, as agreed between the parties the matter is adjourned to 3 March 2006 at 10a.m. for the hearing of the applicant's application for an extension of time and interim order.