Bannister v Department of Finance and Services [2011] NSWADT 290

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Bannister v Department of Finance and Services [2011] NSWADT 290 Hearing dates: 31 October 2011 Decision date: 07 December 2011 Jurisdiction: General Division Before: C Huntsman, Judicial member Decision: Set aside the reviewable decision and remit the matter for reconsideration by the Respondent in accordance with a direction that the Respondent accept that the Applicant is a fit and proper person to hold a contractor licence, category builder. Catchwords: Fit and proper person Legislation Cited: Section 20 Home Building Act 1989 Cases Cited: Pobjie v Commissioner for Fair Trading, NSW Office of Fair Trading (No 2) [2008] NSWADT 39 Category: Principal judgment Parties: Neal Bannister (Applicant) Department of Finance and Services (Respondent) Representation: Neal Bannister (Applicant In person) Legal Services, Department of Finance and Services (Respondent) File Number(s): 113212

Reasons for decision

Background 1On 24 February 2011 the applicant, Mr Bannister, completed an application for an individual contractor licence, builder, which was registered as received by the respondent, the Department of Services, Technology and Administration, on 28 February 2011. By letter dated 4 May 2011 the respondent decided to refuse the application for a contractor licence. The applicant sought an internal review of the decision and on 12 July 2011 the original decision to refuse the application was confirmed.The applicant seeks review of this decision by the tribunal. 2The applicant had previously held a contractor licence, category builder, for some 31 years and in 2010, due to oversight, did not apply to renew the licence. In February 2011 he applied for a licence, this application being the subject of the current review proceedings. In recent years the applicant had been director of a group of building companies (the Bannister group of companies) which had encountered financial difficulties. On 14 July 2008 Alan Hayes and Christopher Hill of PPB Advisory (PPB) were appointed as administrators of the Bannister group. On 18 August 2008 PPB were appointed liquidators of the Bannister group. On 26 September 2008 the applicant entered into a personal insolvency agreement (PIA) with the receiver. From this date the applicant was disqualified, under the Corporations Act 2001, from being a director. On 2 December 2010 the applicant was discharged by the trustee from his debts and had satisfied his obligations under the PIA. Due to the failure of the companies, there were insurance claims against the companies for incomplete work, and various contracts with consumers were unable to be completed. 3The applicant previously held an individual contractor licence, issued 28 August 1998, expired 25 August 2010, category builder. The Bannister group of companies held licences (there was more than one licence for the group, licences were held by the companies with in the Bannister group of companies), issued in May 2001, expiring 21 May 2011 and cancelled 11 September 2008. For each of the corporate licenses the applicant was the sole director and nominated supervisor with the exception of Northtek Developments Pty Ltd (one of the companies in the group) where the applicant was one of two nominated supervisors. 4The applicant submitted the application for a contractor licence in February 2011 and in March 2011 the Delegate of the Commission of the Fair Trading requested additional information from the applicant regarding the Bannister group of companies. 5The delegate noted that a records search with the Australian Securities and Investments Commission (ASIC) had provided advice that the applicant was a director of Bannister Corp (New South Wales) Pty Ltd, Bannister Corp Pty Ltd, Bannister Constructions Pty Ltd and Northtek Developments Pty Ltd ("the Bannister Group of companies") which were all placed under administration/controller appointed on 18 August 2008. The respondent requested information about the situation leading up to the administrator/controller being appointed, including provision of reasons for the said appointment, details as to whether all reasonable steps were taken to avoid the administration/controller being appointed, and the provision of information including independent reports relating to the appointment of the administration/controller, (for example, liquidators reports and the initial creditors report at the time of administration). The correspondence noted that the applicant was required to demonstrate that he is able to complete residential building contracts in the future and to satisfy this needed to provide a statement of affairs, particularly a statement of assets and liabilities prepared by his accountant. It was indicated that the statement must include a favourable opinion about his ability to run a financially successful business. The applicant was also requested to provide information about why this information (about the Bannister group companies) was not declared by the applicant in his answers to the questions in section 7 of the application form. The applicant was requested to provide reasons for the Personal Insolvency Agreement and to provide the trustee report, including a list of creditors, regarding the personal insolvency agreement. The correspondence from the respondent also refers to a number of home warranty insurance claims recorded against the licence held by the Bannister group of companies. The applicant was asked to provide information in respect of the claims, and to provide a written explanation why the insurance claims were not declared in the application. The applicant was also asked to supply a written explanation why the cancelled licences previously held by the Bannister group of companies, were not declared to the respondent. The applicant entered into a Personal Insolvency Agreement and was recently discharged from his obligations under the agreement by the trustee. 6By letter dated 7 April 2011 the applicant provided a written response to the questions raised by the respondent. 7On 12 July 2011, on internal review, the respondent affirmed and varied the original decision to refuse the application for a contractor licence. The statement of reasons for the internal review decision details that the respondent concluded that when the applicant failed to correctly answer the questions in section 7 of the licence application form, this was a deliberate attempt by the applicant to conceal events that may have had an adverse impact upon his application; and the respondent considered that the application should be refused in accordance with section 20(1)(a) and 20(1A) of the Act as it was considered that the applicant is not a fit and proper person. On internal review one of the original grounds for refusal of the application - that of there having been an un-reasonable number of insurance claims - was set aside as it was considered on internal review that the applicant could not be considered as a "relevant person" in relation to clause 25 (1) (A) (8) of the Home Building Regulation 2004 (the Regulation). In relation to the answers by the applicant on the application form, at section 7, the internal review statement of reasons details that the applicant ticked "no" to a number of questions, including questions relating to whether he had "entered into arrangements with creditors or assigned property to pay debts within the last three years"; whether he had been a "director or a manager of a company which was subject to a winding up order, placed into receivership or administration, or under official management, controller appointed, or entered into other arrangements with creditors due to insolvency"; whether "any partnership or company of which you were/are a member or director, had any insurance claims paid against contracts entered into force residential work"; and whether "you or any partnership or company of which you were/are a member or director, had any complaints launched or compliance action commenced arising from your activities in relation to the conduct of residential work". The internal review statement of reasons notes the reason provided by the applicant for incorrectly answering questions in section 7 of the licence application form: "My reason for answering section 7 the way I did was because the notes and information at the back of the document that was referred to if the answer was yes, did not seem to be relevant to my situation I do not have a copy of the information it was not sent back to me, but from memory it was referring to an individual who had become bankrupt. I had never been bankrupt, I entered into a personal individual arrangement only (PIA) in September 2008. You will notice I wrote yes on the form and then changed it after reading the back page, as my understanding was that it was not relevant to my case"