Bonny v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 98

CITATION: Bonny v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 98

DIVISION: General Division

APPLICANT Matthew John Bonny

PARTIES: RESPONDENT Commissioner for Fair Trading, New South Wales Office of Fair Trading

FILE NUMBER: 073271

HEARING DATES: 10 December 2007

SUBMISSIONS CLOSED: 10 December 2007

DATE OF DECISION: 1 April 2008

BEFORE: Leal S - Judicial Member

CATCHWORDS: Home Building Act - home builder - renewal of contractor licence

MATTER FOR DECISION: Principal matter

LEGISLATION CITED : Home Building Act 1989

CASES CITED: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Hughes & Vale Pty Ltd v State of New South Wales (1955) 93 CLR 127 at 156-7

APPLICANT E White, barrister REPRESENTATION: RESPONDENT W Maynard, solicitor

ORDERS: 1. The decision of the Commissioner for Fair Trading to refuse to renew Mr Bonny's individual contractor licence is set aside 2. The matter is remitted for reconsideration with the direction that, subject to his meeting any other relevant criteria, Mr Bonny should be issued with a licence.

REASONS FOR DECISION Introduction 1 An individual contractor licence number 38628 was issued to Mathew John Bonny on 15 June 1987, the work category being for builder with no restrictions or conditions. It was renewed annually over the following twenty years. 2 On 3 May 2007, Mr Bonny submitted an application for renewal of his individual contractor licence. The licence was due for renewal on 14 June 2007. 3 On 2 August 2007, the Commissioner for Fair Trading ('the Commissioner') made a decision to reject Mr Bonny's application for renewal. An internal review dated 23 August 2007 gave the following reasons for confirming the Commissioner's decision: The cancellation of MJB Contracting Pty Ltd in January 2007 and the circumstances surrounding the cancellation (non-disclosure of insurance claims paid against contracts on which the applicant has undertaken work) is considered to be an event in the previous 12 months that would affect the renewal of Licence 38628 in June 2007. The applicant did not declare this event on the renewal application of Licence 38628. The applicant has made statements that he was not aware that claims had been made against building works that he was involved in. The Commissioner has evidence that the applicant was sent correspondence informing him of the claims. The applicant has made statements that he was not aware that claims had been made against building works that he was involved in. The Commissioner has evidence that the applicant was sent correspondence informing him of the claims. 4 Mr Bonny applied to the Tribunal on 13 September 2007 to seek a review of the internal decision to reject his application for renewal of his individual contractor's licence. Under section 83B of the Home Building Act 1989 ('the Act'), the Tribunal has the power to review a decision to refuse to renew an authority, which, under section 83A of the Act, includes a contractor licence. Issues 5 The Tribunal's task is to make the correct and preferable decision having regard to the material before it. 6 In this case, the Tribunal is to determine: a) whether there was a fail to disclose by Mr Bonny; b) whether it is satisfied that Mr Bonny is a fit and proper person to hold an individual contractor's licence as required by section 40(1)(a) of the Home Building Act; and c) whether the decision not to renew Mr Bonny's licence was the correct and preferable decision. Legislation 7 Section 40 of the Home Building Act relevantly provides: 40 Renewal or restoration of authorities (1) The Director-General must reject an application for the renewal or restoration of an authority if: (a) the Director-General is not satisfied that the applicant is a fit and proper person to hold the authority, or (b) the applicant is a mentally incapacitated person, or (c) the applicant is disqualified by this Act or the regulations from holding the authority or would be so disqualified when the renewal would take effect, or (d) the Director-General considers that a close associate of the applicant who would not be a fit and proper person to hold an authority exercises a significant influence over the applicant or the operation and management of the applicant's business. (1A) Without limiting sub-section (1)(a), in determining whether an applicant is a fit and proper person to hold an authority the Director-General is to consider whether the applicant is of good repute, having regard to character, honesty and integrity. Was there a failure to disclose? 8 Question 9 of the application form to renew an authority appears to be worded as follows: I declare that there have been no events or occurrence in the past year that would adversely affect the renewal of this licence except for any details I have attached to this renewal form. Events that may affect the renewal of this licence include (but are not limited to): a) orders of a court or tribunal; b) insurance claims in regard to work performed under this licence; c) criminal offences recorded against individuals; partners or directors; d) bankruptcy of individuals/partners/directors OR companies placed into liquidation/receivership/administration. 9 As the application form itself is not in evidence, the Tribunal relies on the Commissioner's internal review as to the wording of the question. 10 According to the New South Wales Office of Fair Trading, the applicant ticked no in answer to that question. 11 In its original decision, confirmed on review, the Commissioner found that the applicant was not a fit and proper person to hold the authority on the basis that he had not disclosed, in answer to question 9, that the licence for MJB Contracting Pty Ltd, a company of which he was a director, had been cancelled because Mr Bonny, as the sole director and nominated qualified supervisor for the company, had an unreasonable number of insurance claims paid as a relevant person in regard to Bona Builders Pty Ltd and Regency Development Pty Ltd. 12 The section 58 documents provided by the Office of Fair Trading disclose the following chronology: On 22 November 2005, a contractor's licence issued to MJB Contracting Pty Ltd On 16 April 2007, a letter is sent to Mr Bonny's legal representatives by Steve Griffin for the Commissioner for Fair Trading. The letter states 'I refer to your representations on behalf of Mr Bonny concerning the review of cancellation of Licence Number 180006C for MJB Contracting Pty Ltd under the Home Building Act 1989. A senior officer of Licensing has reviewed the circumstances surrounding the cancellation of Licence Number 180006C and Mr Bonny will receive notification of the outcome of the review shortly.' A letter dated 16 April 2007 by G Wright for Commissioner for Fair Trading to Mr Bonny states in part 'I refer to your letter of 8 February 2007 requesting a review of the cancellation of the contractor's licence for MJB Contracting Pty Ltd under the Home Building Act 1989. The circumstances surrounding the cancellation of the licence has been reviewed with the result that the licence will remain cancelled.' No statement of reasons documents is attached to the file copy of this letter, nor is there any reference to a statement of reasons to accompany the decision nor any information about any appeal rights from the decision. In a letter from Mr Bonny, as Director of MJB Contracting Pty Ltd, dated 10 July 2007, he writes 'Following our discussions when we met personally at your address to the Builders of ABS (Australian Building Services) please find attached my Statutory Declaration in respect of the circumstances surrounding the application of MJB Contracting Builders Licence 180006C … . As advised, you have offered to look into my case and review the circumstances surrounding the issues as detailed in my previous submission.' A letter dated 23 August 2007 to Mr Bonny from G Wright for the Commissioner for Fair Trading states 'I refer to the Commissioner's decision to cancel Licence 180006C under the Home Building Act 1989.The Commissioner's decision has been reviewed and the decision to cancel licence 180006C has been confirmed. The reasons for the decision taken in regard to the internal review are contained in the document, Statement of Reasons at Attachment A dated 23 August 2007. The internal review of the decision is considered to have been finalised. Should you disagree with the result of the internal review, to have the right under the ADT Act 1997 to seek a review with the ADT.' 13 It would appear from the letter dated 23 August 2007 that, up until that point, the cancellation decision had not been finalised. Prior to that date, all that is revealed on file is a copy of a letter dated 16 April 2007 - apparently sent to Mr Bonny, but with no confirmation of it having been sent - which advises that his licence is to stay cancelled but which is accompanied by no statement of reasons or appeal rights. 14 I am not satisfied that Mr Bonny received the letter dated 16 April 2007. On the evidence on the file, I am not satisfied that a final decision as to cancellation of the licence was made until 23 August 2007 and that Mr Bonny was notified of this final decision after that date. 15 This would accord with the evidence given by Mr Bonny at the Tribunal hearing in which he stated 'the cancellation was still under review as far as I was aware. It wasn't all over.' 16 I believe Mr Bonny when he says that he thought that the cancellation was still under review at the time of the lodgement of his application for renewal on 3 May 2007. If the cancellation had not been finalised, I find that Mr Bonny was under no obligation to disclose it in his application for renewal of his contractor licence. 17 The wording of question 9 on the application for renewal of an authority is unclear. If decisions of the New South Wales Office of Fair Trading are required to be disclosed in response to this question, then this requirement should be clearly stated. Each of the examples given as to the types of events to be disclosed in answer to question 9 refers to decisions that are not those of the New South Wales Office of Fair Trading. This might well lead an applicant to assume that decisions by the New South Wales Office of Fair Trading are not required to be disclosed in answering this question. 18 In light of the above circumstances, I find that Mr Bonny did not fail to disclose a relevant event in accordance with the requirements of the application form for renewal of an authority. Fit and proper 25 The Commissioner must reject an application for the renewal or restoration of an authority, such as a contractor licence, if not satisfied that the applicant is a fit and proper person to hold the authority: section 40(1)(a) of the Act. The term 'fit and proper' is not defined in the Act. Sub-section 40(1A) of the Act requires the Tribunal to consider whether the applicant "is of good repute, having regard to character, honesty and integrity". 26 This Tribunal has frequently cited the decision in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 as a guide to the meaning of "a fit and proper person". In that case Toohey and Gaudron JJ stated (at 380): The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question. 19 Their Honours further stated (at 388): The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration. 20 The decision whether or not to grant a licence must be considered keeping in mind the activities in which the person will be engaged: Hughes & Vale Pty Ltd v State of New South Wales (1955) 93 CLR 127 at 156-7. 21 Apart from finding that in answering question 9 of the renewal application form, Mr Bonny had failed to disclose that the licence for MJB Contracting Pty Ltd had been cancelled because Mr Bonny had an unreasonable number of insurance claims paid as a relevant person, the Commissioner did not refer to any other issues when considering whether Mr Bonny was a fit and proper person to hold a licence. 22 A report on Mr Bonny prepared by a review officer of the New South Wales Office of Fair Trading on 13 April 2007 made the following observations: a) Mr Bonny is not bankrupt and from the available information, has never been bankrupt; b) Lumley General Insurance advises that the applicant is an acceptable risk management for a licence to be issued under the Act. It is more likely that Lumley General Insurance would have access to the insurance history of an applicant before it made the decision to provide eligibility to Mr Bonny. c) Declaration of insurance claims Mr Bonny is the sole director and qualified supervisor for MJ Contracting Pty Ltd. A question on the application for this company was 'has any director/member as an individual, or any partnership or company of which they were a member or director, had any insurance claims paid against contracts entered into for the residential work.' Mr Bonny ticked 'no' to the question. There are 12 external insurance claims for Regency Developments Pty Ltd and four external claims and three internal claims for Bona Builders Pty Ltd. Therefore Mr Bonny did not truthfully answer this question when completing the application for MJ Contracting Pty Ltd Complaints received by Fair Trading recorded against the licence held by Bona Builders Pty Ltd The seventeen complaints recorded against Bona Builders Pty Ltd cannot be commented as to the reasons for the complaints without examining the individual complaint files. The BSS reveals that a large proportion of the complaints were referred to either the Tribunal or for a claim on insurance. Further, there is no record of an investigation undertaken by building compliance into the complaints. Therefore, it was decided not to retrieve the seventeen files, as the reasons for the complaints would be irrelevant for the purpose of this document. It is the number of complaints in addition to the insurance claims that are of concern. 23 Contained on file are 13 printouts headed External Insurance Claim in relation to Regency Developments (Aust) Pty Ltd. Each printout is for one claim and states the date claimed and the settlement amount. The first claim was made on 24 October 2002 and the more recent claim was made on 30 May 2007. There is no dispute that claims were made, rather Mr Bonny submits that he was not aware whether or not they had been paid. 24 In evidence contained in his affidavit signed and dated November 2007, Mr Bonny gave details as to his recollection of complaints lodged against companies for which he was a director and how the defects had been rectified. 25 He further gave evidence that when he left the relevant companies (Bona Builders Pty Ltd and Regency Developments (Aust) Pty Ltd), whilst he had been aware that some claims had been made, he had not been aware of claims paid and had therefore truthfully answered the question in the application form. 26 The Commissioner brought no evidence to contradict Mr Bonny's evidence. 27 A note dated 31 July 2007 to Glenda Wright of the New South Wales Office of Fair Trading from Sang Tran of Insurance Services provides as follows: I refer to our telephone conversation today regarding your inquiry about Bona Builders Pty Ltd (LN23893) and Regency Developments (Australia) Pty Ltd (LN 959 11C). As you may be aware that SCS, who processed home warranty insurance at that time, notified the builder after receipt of the lodgement of insurance claim (for instance insurance 2512 and 2726). If the builder was not interested in rectification and/or denied responsibility, SCS would further processed the claim and paid. When the claim was paid, SCS did not have to notify the builder. (my emphasis) I suppose that the builder had been notified or aware of the insurance claims against his company, given the high number of claims against the company, Mr Bonny was sole director and tech supervisor of Regency Development. 28 The note from Sang Tran, confirming that the insurer was not under an obligation to inform the builder once a claim was paid, supports Mr Bonny's evidence that whilst he was aware of claims made, he was not aware of claims paid. 29 A bankruptcy report for Matthew Bonny dated 22 June 2007 states that 'no bankruptcy records were found with the above name.' 30 Ten references attesting to the high standard of Mr Bonny's work are contained in the section 58 documents supplied by the New South Wales Office of Fair Trading. 31 A former client, Ian Darling wrote: Matt is indeed a highly professional quality builder. He is very experienced, organised and highly reliable … . He is very dependable, who never failed to repair or rectify any defects. His management skills are first class, his invoices and budgets accurate, and his time management was excellent … . I highly commen[d] the skills, honesty and integrity of Matt Bonny. 32 The architect, Joanna Lukaszewicz wrote: I have found Matt to be a true professional, well experienced, organized and reliable. 33 Ms Cass O'Connor, the client for whom Mrs Lukaszewicz was the architect, wrote: Matt himself displayed honesty, courtesy, common sense, diligence and humour throughout the job. He helped smooth neighbourly relations, stuck to his contract and even did a show and tell with the children on 'Being a Builder'. MJB came in on budget, quite possibly to his detriment. 34 Mr N Di Pietro, Director of Seymour Building Supplies wrote: I have known Matt Bonny for more than 20 years. In this time I have held Matt in great esteem, not only for his professionalism in all our dealings but also for his organisational skills. Matt produces and expects first quality workmanship, as someone with his long and extensive experience would expect and I have always found Matt to be honest and trustworthy. 35 No objection was taken to these references by the respondent and none of the referees were requested to give oral evidence at the hearing. 36 In light of: a) the Tribunal's finding that Mr Bonny did not fail to disclose a relevant event in completing his application for renewal; and b) the advice from Lumley General Insurance that Mr Bonny is an acceptable risk management for a licence to be issued under the Act; and c) Mr Bonny's evidence at hearing and the references contained on file, the Tribunal considers that, on the totality of the evidence, Mr Bonny's conduct is not such as to warrant the conclusion that he is not a fit and proper person to hold an individual contractor licence. Correct and preferable decision 37 On the basis of the Tribunal's finding that there was no failure to disclose a relevant event on the renewal application form and, that there is, on the totality of the evidence, no reason to warrant the conclusion that Mr Bonny is not a fit and proper person, the Tribunal concludes that the decision to refuse to renewal Mr Bonny's licence is not the correct and preferable decision. There may be other matters, which the applicant is required to satisfy and the appropriate course is to remit the matter to the respondent for reconsideration. Orders The decision of the Commissioner for Fair Trading to refuse to renew Mr Bonny's licence is set aside The matter is remitted for reconsideration with the direction that, subject to his meeting any other relevant criteria, Mr Bonny should be issued with a contractor licence.