Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Hayes v NSW Fair Trading [2013] NSWADT 240 Hearing dates: 24 April 2013 Decision date: 29 October 2013 Jurisdiction: General Division Before: P H. Molony, Judicial Member Decision: The decision of the Agency to take disciplinary action against Mr Hayes and to require him to pay a penalty of $1000 is set aside. Catchwords: Home Building - obligations of nominated supervisor for company licensee Legislation Cited: Administrative Decision Tribunal Act 1997 Home Building Act 1989 Cases Cited: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409. Category: Principal judgment Parties: Adam Hayes (Applicant) NSW Fair Trading (Respondent) File Number(s): 133029 REasons for decision Introduction 1Mr Hayes has held a contractor licence (concreting) under the Home Building Act 1989 ('the HBA") since 21 May 2002 until now. A certificate issued by NSW Fair Trading under s 131 of the HBA shows that he was also the nominated supervisor for a company licensee, Perfect Pool Surrounds Pty Ltd ("Perfect Pools"), in the category general concreting, from 1 March 2005 until 1 March 2012. A s 131 certificate is prima facie evidence of its contents. 2Mr Hayes has applied to the Tribunal to review a decision of NSW Fair Trading (the Agency) made on 21 January 2013 (and affirmed when reconsidered on 12 April 2013) finding that he is guilty of improper conduct under s 53(1)(b) of the HBA on that basis he, "as the nominated supervisor for Perfect Pools" breached a statutory warranty in the course of doing residential building work at premises at Bolwarra Heights. 3That breach was constituted by defective work to a pool surround which resulted in the decorative pavers, trim and coping cracking and dislodging. According to a report prepared by Mr Phil Ward, a building inspector with the Agency, on 20 November 2011, the defect was the failure to provide necessary isolation and expansion joints. The Agency found that the defective work constituted a ground to take disciplinary action against Mr Hayes, and decided to require Mr Hayes to pay a penalty of $1,000.00. 4In correspondence with the Agency Mr Hayes denied that he had ever been Perfect Pools nominated supervisor. This was rejected by Fair Trading. 5Section 63 of the Administrative Decision Tribunal Act 1997 (the ADTA) says that in determining an application for review the Tribunal is to make the correct and preferable decision having regard to the material before it, and any applicable written or unwritten law. It is well established that in considering an application for review the Tribunal is not constrained to have regard only to the material that was before the Commissioner, but may have regard to any relevant material before it at the time of the review: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409. Mr Hayes' evidence 6Mr Hayes denies that ever acted for Perfect Pools, or was employed by it, as its nominated supervisor. He says that he ran his own concreting business until he ceased doing general concreting work in August 2008, due to ill health. This included work as a sub-contractor for Perfect Pools between April 2004 and August 2008, when he ceased general concreting work. 7Among the work he did for Perfect Pools was the concreting work for the pool surrounds for the premises at Bolwarra Heights. His invoice to Perfect Pools for doing this work was dated 13 May 2007. He did not do the paving work. Mr Hayes does not dispute that the paving work was defective, but maintains that his concreting was up to standard. He asserts that he was not the nominated supervisor for Perfect Pools with respect to that work. 8Mr Hayes was shown a five page application for a company contractor licence completed in the name of Perfect Pools on and lodged with Fair Trading on 28 January 2005. Page five contains details of the company's nominated qualified supervisor. In it Mr Hayes is named as the company's supervisor. He agreed that the address details and signature were his and had been completed by him. His signature in is dated 24 January 2005. It appears under the following statement - I am either a director or member or genuine full time employee ... of the abovenamed and I am well aware of the responsibility of being the nominated supervisor. I understand that a full-time employee means an employee who is required by the terms of his employment to work for his or her employer otherwise than on a casual or temporary basis. 9Mr Hayes said he could not remember signing the application, but agreed that he must have done so. He speculated that this might have occurred in early 2005 when there was talk of him being employed by Perfect Pools as project manager, as its then project manager was leaving. He said that the proposal that he take on this role was never acted on, and that he continued operating his own business. He accepted that he must have signed the application form and acknowledged that he should not have done so. 10Mr Hayes said he had not been aware, until he was contacted by Fair Trading in respect of this matter, that Fair Trading's records showed him as the qualified supervisor for Perfect Pools. He pointed out that there was nothing on the renewal advices sent to him with respect to his contractor licence that indicated that the Agency had him as Perfect Pool's qualified supervisor. If it had, he would have taken action to remedy that situation. 11He provided employment, taxation and financial records that demonstrated he had not worked as concreter since August 2008, and that he had not worked as an employee of Perfect Pools. I accept that is the case. Additional information provided by the Agency 12During the hearing I asked Ms Lu who appeared for the Agency whether when the holder of a contactor licence becomes a nominated supervisor, that person's contractor licence is altered to show it is an endorsed contractor licence. Her instructions were that this did not occur. 13Since the hearing the Tribunal has received a letter from Ms Lu seeking to clarify this advice. In a letter dated 9 May 2013 she wrote - I advise that the information given to the Tribunal requires further clarification. A person may be a nominated supervisor if (amongst other things) the person holds an endorsed contractor licence or a supervisor certificate (clause 26(4) Home Building Regulation 2004). Mr Hayes held an endorsed contractor licence when the licence was first issued to him. Mr Hayes was therefore eligible to be a nominated supervisor. I can confirm that when a person becomes a nominated supervisor, his licence (card) is not altered to show that he is a nominated supervisor. I can also confirm that when the renewal forms are sent to the licensees they do not show that the person is a nominated supervisor The Legislation 14Mr Hayes holds an individual contractor licence under the HBA in the licence category "general concreter". Perfect Pools on the other hand held a corporate licence. 15The scheme of the HBA with respect to licenced contractors requires that persons, partnerships or corporation be licensed in order to do any residential building work: s 4. Applications for contractor licences are made under s 19 and are to be issued in accordance with s 20. Section 25 is concerned with the issue of tradesperson and supervisor certificates. Section 26 provides that - If a contractor licence is issued to an applicant who the Director-General considers is qualified to hold a supervisor certificate, the Director-General may, instead of issuing such a certificate, endorse the contractor licence to show that it is equivalent to such a certificate. 16Clause 25 of the Home Building Regulation 2004 specifies the general requirement for obtaining a contractor licence or certificate under the Act. Both are referred to in the Regulation as an authority (see clause 3). Clause 26 provides certain additional requirement with respect to nominated supervisors. Relevantly, it 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 (b) ... (4) 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, an employee of, or a member of the partnership or director of the corporation that is, the applicant or holder, and (c) made a consent declaration that is lodged with the Director-General and has not been revoked. (5) In subclause (4) (b), 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. (6) Subject to subclause (7), an individual cannot be the nominated supervisor for more than one contractor licence unless the Director-General: (a) is satisfied that special circumstances exist that will ensure that the individual, either alone or in conjunction with one or more other nominated supervisors, will supervise all work done under contracts for which each contractor licence is required, and (b) gives written permission. (7) The holder of an endorsed contractor licence does not require the Director-General's permission to become the nominated supervisor for only one other contractor licence. (8) The Director-General may, by order, exempt an applicant from a requirement in relation to nominated supervisors if the Director-General is satisfied that there are special circumstances that warrant it. 17Clause 32 places certain obligation on individual licence holders, such as Mr Hayes, who act as nominated supervisors for other licensees. It provides - (1) An individual who is the holder of a contractor licence must, within 7 days of becoming or ceasing to be a nominated supervisor, notify the Director-General in writing of the following particulars: (a) If the holder becomes a nominated supervisor for another contractor licence-the date of the consent declaration, the name of the holder of the other contractor licence and its number. (b) If the holder ceases to be a nominated supervisor for another contractor licence-the date of so ceasing, the name of the holder of the other contractor licence and its number. (2) An individual who is the holder of a contractor licence and the nominated supervisor for more than one contractor licence must, within 7 days after becoming aware of any material change in the circumstances that warranted the Director-General giving permission allowing the individual to be a nominated supervisor for more than one contractor licence, notify the Director-General in writing of the following particulars: (a) the date on which the holder became aware of the change, (b) details of the change. 18Clause 31 creates corresponding obligations that relate to contractors generally. It provides - The holder of a contractor licence must notify the Director-General in writing of the following particulars within 7 days of the specified events occurring and must provide any specified documents: (a) Special permissions and exemptions If the holder becomes aware of any material change in the circumstances that warranted the Director-General giving permission allowing an individual to be a nominated supervisor for more than one contractor licence or making an order exempting a licensee from having a nominated supervisor-the date on which the holder became aware of that change and the details of the change. (b) Nominated supervisors If a nominated supervisor for the contractor licence ceases to be an employee, member or director of the holder-the date of cessation, the supervisor's name, and the type of authority held by the qualified supervisor and its number. (c) If a person is selected to be a nominated supervisor for the contractor licence after it has been issued-the qualified supervisor's name, the type of authority held and its number. (The person's consent declaration must accompany any such notification.) 19Section 18B of the HBA implies warranties into all contracts for residential building works. It relevantly provides - The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work: (a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract, (b) ... (c) a warranty that the work will be done in accordance with, and will comply with, this or any other law, ...\ 20Section 51 then provides that the holder of a contractor licence who breaches a statutory warranty is guilty of improper conduct. It says- (1) A holder of a contractor licence who is authorised by the contractor licence to contract to do residential building work or specialist work, or a holder of a supervisor or tradesperson certificate, is guilty of improper conduct if the holder: (a) ... (c) breaches a statutory warranty, or (d) ... 21This then constitutes a ground for taking disciplinary action. Section 62 relevantly says - If, after compliance with this Division, the Director-General is satisfied that any ground on which disciplinary action may be taken against the holder of an authority has been established in relation to the holder, the Director-General may do any one or more of the following: (a) determine to take no further action against the holder, (b) caution or reprimand the holder, (c) make a determination requiring the holder to pay to the Director-General, as a penalty, an amount not exceeding $11,000 (in the case of an individual) or $50,000 (in the case of a corporation) within a specified time, (d) vary the authority held by the holder, by imposing a condition on the authority, including a condition requiring the holder to undertake a course of training relating to a particular type of work or business practice within a specified time, (e) suspend the authority for a period not exceeding its unexpired term, (f) cancel the authority, (g) disqualify the holder, either temporarily or permanently, from being any one or more of the following: (i) the holder of any authority, or any specified kind of authority, (ii) a member of a partnership, or an officer of a corporation that is a member of a partnership, that is the holder of an authority, (iii) an officer of a corporation that is the holder of an authority. Issues 22There are a number of issues requiring determination in this case. They are: * Whether in the light of all the evidence Mr Hayes was the nominated supervisor for Perfect Pools responsible for the supervision of the defective work at the premises at Bolwarra Heights? (If so, he will be guilty of improper conduct as a result). * If there has been improper conduct, what, if any, penalty should be imposed on Mr Hayes? Was Mr Hayes the nominated supervisor? 23To demonstrate that Mr Hayes was Perfect Pools' nominated supervisor responsible for the defective work at the Bolwarra Heights premises the Agency relies on: * A certificate issued under section 131 of the HBA. * His signature appended to the details of the nominated supervisor in Perfect Pool's application for a contractor licence dated 24 January 2005. * The fact that Mr Hayes had not advised the Agency that he was not and had never been the nominated supervisor for Perfect Pools. 24Section 131 of the HBA relevantly provides that - A certificate purporting to be signed by a prescribed officer of the Department of Fair Trading and certifying: (a) ... (b) that an individual was or was not, on a day or during a period so specified, the holder of an endorsed contractor licence or of a supervisor or tradesperson certificate or owner-builder permit and, if such a holder, that the individual was or was not then authorised by the contractor licence, certificate or owner-builder permit to do or supervise (or both) work so specified, or (b1) (Repealed) (c) that an individual so specified was or was not a nominated supervisor, or (d) ... is admissible in evidence in any proceedings and is prima facie evidence of the matters stated in it. 25This is an evidentiary provision that creates a prima facie presumption that certificate in this case is correct when it states that Mr Hayes was the "nominated supervisor for Company licence for Perfect Pool Surrounds Pty Ltd form 1 March 2005 to 1 March 2012." That presumption is however a rebuttable presumption that may be displaced by evidence to the contrary. 26When the Agency reconsidered its decision to discipline Mr Hayes on 12 April 2013 the delegate determined that clause 26(4)(b) of the HBR - ... does not require a person to an employee of a contractor licence holder in order to become its nominated supervisor. It allows a person who is proposed to be an employee of the contractor licence holder, to become its nominated supervisor. In my opinion, your signing of the "Nominated Qualified Supervisor" document, which declared that you were an employee of Perfect Pool and that you consented to being proposed as its nominated supervisor was sufficient for the Commissioner to accept that it was at least proposed that you would be an employee of Perfect Pool even if you were not one at that time. I am therefore, of the view that you were legally appointed as the nominated supervisor for Perfect Pool's contractor licence at the time that Perfect Pool's application for a contractor licence, which included your signed consent to be its nominated supervisor, was submitted to the Commissioner. 27In my view the question of whether a person such as Mr Hayes is the nominated supervisor of a company is a question of fact to be determined in the light of all the evidence. In some circumstances a certificate under s 131 of the HBA may be enough. However, where there is evidence lead to rebut the s 131 presumption, the proper determination of the question of fact will require a consideration of all the relevant circumstances. They include a consideration of what notifications have been given to the Agency with respect to whether or not the person is acting as nominated supervisor. 28In this regard clause 26(4) is important. It specifies requirements relating nominated supervisors that an applicant for a contractor licence must satisfy and, among other things, allows proposed employees of companies to be nominated supervisors for those companies. Sub- clause (5) makes it clear that such employment is not to be casual or temporary. The provisions of clause 26(4) are consistent with the requirements of s 20(3)(b) of the HBA that provides - (3) The Director-General must refuse an application for a contractor licence if: (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, 29Other provisions in the HBR are also concerned with notifications to the Agency concerning nominated supervisors. Clause 32(1)(a) places an obligation on a person who becomes a nominated supervisor to notify the Agency of "the date of the consent, the name of the holder of the contractor licence and its number". This is important for a number of reasons. 30First, it creates a distinct and separate obligation on persons who "become" rather than are "proposed" to be nominated supervisors to advise the Agency that they have become the nominated supervisor for another licence holder. In other words they are to tell the Agency when they have begun or commenced such duties. Secondly, by requiring a person who becomes a nominated supervisor to give details of the date of their consent declaration, the clause provides a means of cross checking when proposed supervisors actually commence their duties. (It also makes it clear that the consent notification and the advice of becoming a nominated supervisor are intended to be separate). Thus, with a newly licenced company, the Agency should be readily able to determine whether a proposed authorised supervisor has commenced work by checking to see if that person has given notice of actually becoming the supervisor. Without both, the Agency will not be in a position to determine that the company has a working supervisor, without making further enquires. Clause 32(2) places similar obligations on person who seek to be licence holders. 31Additionally, clause 31(b) provides that when a nominated supervisor ceases to be a director or employee of the holder of a company licence. they are to give notice of such to the Agency. Importantly, that provision does not refer to a proposed employee or director, but envisages that any nominated supervisor must have "become" an employee of director. 32In Mr Hayes case the company had provided the Agency with a pro-forma consent declaration which was included in its licence application. That consent was signed by Mr Hayes under the statement quoted in paragraph 8 above. There was no room or facility in the form or statement for him to indicate that he was a proposed employee. 33Mr Hayes's evidence is that when he signed the consent he was not an employee of Perfect Pools, although there was active discussion about him becoming one. In those circumstances he should not have signed the declaration without altering it. As he has no clear recollection of actually signing the document, but acknowledges that he did, it is clear he did not pay sufficient attention to his responsibilities when doing so. 34Despite that failure on his part I accept Mr Hayes evidence that he was not then and has never been ether an employee of Perfect Pools, or acted as nominated supervisor for it. It is clear from the financial records he produced that until August 2008 he was a self-employed concreter, and since then has been in employment outside the concreting trade. 35Additionally I am satisfied Mr Hayes did not at any time advise the Agency that he had become Perfect Pools nominated supervisor. The consent declaration did not fulfil that purpose. 36I am also satisfied that none of the communications which the Agency sent to Mr Hayes as a matter of course alerted him to the fact that the Agency's records showed him as Perfect pool's nominated supervisor. If they had, I accept Mr Hayes would have notified the Agency that this was not the case. Including advice as to whom the Agency believes a licence holder is acting as supervisor for, in licence renewal notices, may be a means of preventing similar difficulties in the future. 37In the light of all the above I am satisfied that evidence is sufficient to displace the presumption that the s 131 certificate is correct. Mr Hayes was not Perfect Pool's nominated supervisor responsible for the oversight of the work at the Bolwarra Height premise. I am satisfied that he was never an employee of Perfect Pools within the meaning of clause 26(5) of the HBR. Conclusion It follows that on review the correct and preferable decision is that Mr Hayes is not guilty of improper conduct under s 51(1)(c) of the HBA. As a result the decision of the Agency to take disciplinary action against Mr Hayes and to require him to pay a penalty of $1000 is set aside. ********** 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. Decision last updated: 29 October 2013