Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Merhi v Commissioner for Fair Trading [2014] NSWCATOD 143 Hearing dates: 30 July 2014 Decision date: 02 December 2014 Jurisdiction: Occupational Division Before: A Scahill ,Senior Member Decision: 1. Accordingly the tribunal affirms the Respondent's decision that Mr Merhi did not meet the 24 months experience requirement as he was neither an employee nor lawfully engaged during this time. 2. The tribunal affirms the Respondent's decision to refuse a licence to Mr Merhi. Catchwords: Experience, lawfully engaged Legislation Cited: Administrative Decisions Review Act 1997 Administrative Decisions Tribunal Act 1997 Civil and Administrative Tribunal Act 2013 Home Building Act 1989 Home Building Regulation 2004 Cases Cited: Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 46 FLR 409 Category: Principal judgment Parties: Matthew Merhi (Applicant) Commissioner for Fair Trading (Respondent) Representation: M Merhi (Applicant in person) File Number(s): 133314 reasons for decision 1Mr Merhi has applied for review of the Respondent's decision on internal review dated 19th of September 2013 under the Home Building Act 1989 ("the Act") to refuse him a contractor licence in the category of general building work. Mr Merhi lodged his application for review of the Respondent's internal review decision with the tribunal on 17 October 2013. 2Mr Merhi had lodged his application for an individual contractor licence with the Respondent on 20 June 2013. He attached to his application: * referee's statements from builders Mr Sam Kassis and Mr Sid Merhi; * certified copies of Certificate III in Carpentry CPC30208 and Certificate IV in Building and Construction (Building) CPC4Q110 and the associated units of competency from Australian Construction Training Services Pty Ltd, both dated 17 July 2012; * a reference titled Witness Testimonial dated 15 June 2013 signed by both Michael Khoudair and Anthony Saliba; and * a summary of his work experience. 3On 25th of July 2013 the Respondent advised Mr Merhi that it was satisfied that his qualifications met requirements but that it did not consider that he had two years of experience lawfully engaged in a wide range of building construction work required by the Instrument under the Regulations to the Act. The Respondent refused Mr Merhi a building contractor's licence. 4Mr Merhi wrote seeking internal review of the decision on 3 August 2013. He provided information about his status as a subcontractor and the addresses of certain jobson which he had worked. The letter was countersigned by his two previous builder referees, Mr Sid Merhi, his father and Mr Sam Kassis. 5The Respondent then sought clarification from Matthew Merhi of the nature of his engagement with these builders - that is whether he had worked as an employee or a subcontractor. 6Mr Merhi then provided the Respondent with documents such as invoices that he had rendered to Sid Merhi and Sam Kassis for his work and a statement from his accountant stating that "to the best of their knowledge he was a subcontractor working under the direct supervision of the builder." 7The Respondent's decision on internal review was that Matthew Merhi did not meet the requirement of having been employed or otherwise lawfully engaged for a 2 year period of experience and refused to issue an authority to him. Relevant Legislation 8The tribunal sets out below the relevant legislation. It deals with: * The requirement to be licensed; * Offences for working without a licence; and * requirements to be met by applicants for licences. 9All bolding is that of the tribunal's - emphasising significant terms. 10The Home Building Act 1989 (the "Act") is concerned with the regulation of the New South Wales home building and specialist work - including plumbing, carpentry, gas fitting, electrical, air conditioning and refrigeration work. Requirement to be licensed 11Section 19(1) of the Act provides that the Director General may grant contractor licences for the purposes of this Act. 12Section 20(3) (a) of the Act specifies that the Director General must reject an application for a licence if the Director General is not satisfied that any requirements would be met were the licence to be issued. 13Section 20(5) of the Act provides that a decision of the Director General relating to determining standards or other requirements under section 20(2) cannot be reviewed by the New South Wales Civil and Administrative Tribunal (NCAT) in an application for review. Offences 14Section 4(1) of the Act is headed Unlicensed Contracting. It makes it an offence to contract to do work without a licence. It states that: "a person must not contract to do: any residential building work, or any specialist work, except as on behalf of an individual, partnership or corporation that is the holder of a contractor licence authorising its hold to contract to do that work." 15Section 12 of the Act is headed Unlicensed Work. It makes it an offence to do residential building work without a licence. It states that: "an individual must not do any residential building work, or specialist work, except: as, or as a member of a partnership or an officer of a corporation that is, the holder of a contractor licence authorising its holder to contract to do that work, or as the holder of an owner builder-permit authorising its holder to do that work, or as an employee of the holder of such a contractor licence or permit." 16Section 13(1) of the Act is headed Unqualified Work. It makes it an offence to do residential building work without the relevant qualifications. It states that : "an individual must not do any residential building work, except: as the holder of an endorsed contractor licence, a supervisor or tradesperson certificate or an owner builder permit authorising its holder to do that work, or under the supervision, and subject to the direction, of the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise that work." Requirements for granting of a licence 17Clause 26(1)(b)(i) of the Home Building Regulation 2004 specifies that before a contractor licence is issued, the Director General must be satisfied that the applicant, amongst other criteria, complies with the requirements prescribed by clause 28(1). 18Clause 28(1)(b) of the Home Building Regulation 2004 specifies that, before a certificate is issued, the Director General must be satisfied that the applicant has had experience of such a kind and for such a period, as the Director General considers would enable the applicant to do, or to supervise, the work for which the certificate is required. 19The definition of "experience" is set out in Instruments gazetted under clause 28 of the Home building Regulation. The relevant instrument at the time of the internal review in September 2013 was that of July 2013. It is set out below. "Experience" means experience gained by the applicant as; an employee of: or a person otherwise lawfully engaged by, the holder of a contractor licence authorising the holder to do the class of residential building work in which the experience was gained (the Work) where during the relevant period, the applicant was: supervised and directed in the doing of the Work by the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise the Work; and financially renumerated for the Work: Refusal of application 20On 25 July 2013, the Respondent refused Mr Merhi's application as it was determined Mr Merhi had not verified the required period of building experience. The letter included the following reasons for refusal: * the applicant was not lawfully engaged in the period of the claimed building experience; and * the dates of the periods of building experience claimed at particular sites were inconsistent with research undertaken by Fair Trading. Request for an internal review 21The request for internal review of 3rd August 2013 included the following statements from Mr Merhi: * he did not work as a subcontractor for Mr Kassis or Mr Merhi and that he was a "supervisor" under their direct supervision; * he amended the dates of his experience at 81 & 83 Breedon Ave West Pennant Hills; and * he amended the dates of his experience at 21 Kambah Place West Pennant Hills. 22The Respondent requested further information from Mr Merhi about his sub-contracting/employment status. Reasons for the decision taken in regard to the internal review 23The internal reviewer concluded Mr Merhi satisfied the approved qualification requirements for a building licence but did not satisfy the" Experience" requirements set out in the Instrument of 3 July 2013 as he had been neither an employee nor lawfully engaged in obtaining his experience. 24The internal reviewer's reasoning was as follows. 25The practical experience requirement for the issue of a building authority is that the applicant is to demonstrate that they have acquired two years full time experience in carrying out the roles, duties and responsibilities required of a residential builder in a wide range of building construction work. 26The period of experience stated by the referee is to be in relation to work for which the applicant was employed or lawfully engaged and financially remunerated. 27The individual is to have gained the experience in accordance with the provisions of the Act which prescribes that an individual must not do any residential building work except as the holder of a contractor licence or a qualified supervisor certificate to do that work or as an employee of the holder of such a contractor license (section 12). Mr Merhi did not have a licence to do this work. 28An individual cannot be subcontracted to carry out residential building work by the holder of a contractor licence unless the individual is the holder of a contractor licence for the work to be carried out (section 4). Mr Merhi did not have a contractor licence. 29On the basis of the information provided by Mr Merhi, Mr Merhi had not been an employee of Sid Merhi or Sam Kassis 30If an individual is employed on a subcontract basis to undertake residential building work when that person is not appropriately licensed to legally contract for the work then the individual cannot be considered to have been lawfully engaged. 31Matthew Merhi has not demonstrated that he has the minimum of two years relevant industry experience as determined by the Director General as necessary to enable him to do, or to supervise building work. Role of the Tribunal on Review 32Mr Merhi's' Application for Review was lodged in the ADT on 17 October 2013. On 1st January 2014, the ADT merged into the NCAT. Clause 7 (3) (b) of Schedule 1 of the Civil and Administrative Tribunal Act 2013 (CATA) provides for unheard proceedings (commenced prior to 1 January 2014 - but not heard) to be considered according to the requirements of the previous legislation - the ADTA. 33Section 83B of the Home Building Act provides that an applicant for the issue, alteration, renewal or restoration of an authority aggrieved by any decision of the Director-General relating to the application may apply to the Tribunal for an administrative review of the decision under section 63 of the Administrative Decisions Review Act 1997. The authorities accept that the Tribunal's review is for the purpose of determining the correct and preferable decision by way of a merits review. The Tribunal may affirm, vary, set aside and make a substitute decision or set aside the decision and remit it to the administrator. 34The hearing is a hearing "de novo" - meaning that the Tribunal may consider the matter from the start, including taking into account fresh evidence brought before the Tribunal. The Tribunal is not restricted to the consideration of the material that was before the Respondent, 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] AATA 179; (1979) 46 FLR 409. The Hearing 35At hearing the parties agreed to proceed by way of the documents provided and oral submissions of their respective positions. No oral evidence was called. 36The tribunal had the following documents before it: * Mr Merhi's application to the Respondent for a contractor licence and all of the documents he had provided to the Respondent; * Mr Merhi's Application to the Tribunal for Review; * An affidavit of Mr Merhi dated 12th June 2014; and * The Respondent's section 58 documents including its internal review decision. The Applicant's submissions 37Mr Merhi provided an affidavit clarifying his working background. He said that since June 2013 he had changed his working status. He had worked for Sid Merhi of A Class Property Pty Ltd as an employee from June 2013 to January 2014 - a period of six months. From February 2014 to July 2014 and continuing he had worked as an employee for Mr Sam Kassis of Kassis Classic Homes. By the date of hearing he had more than 12 months in these 2 employed positions alone. 38Mr Merhi submitted that he had obtained his building and carpentry qualifications in July 2012 but hadn't taken them to the Department of Fair Trading to register them. This meant that he should be considered qualified from July 2012. 39The Applicant submitted that even though he had provided materials in which he had indicated he was a subcontractor prior to June 2013, it was actually irrelevant how he had described himself. He should still have been considered to be an employee as he * attended work for set hours 6 days per week * was supervised by Mr Sid Merhi and Mr Kassis and told what to do and how to do it; and * was paid a regular amount. 40Mr Merhi referred to the provisions of section 13. 13 Unqualified residential building work (1) An individual must not do any residential building work, except: (a) as the holder of an endorsed contractor licence, a supervisor or tradesperson certificate or an owner-builder permit, authorising its holder to do that work, or (b) under the supervision, and subject to the direction, of the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise that work. Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. (2) If the same facts establish an offence under this section and an offence under another provision of this Act or under any other Act or law, an individual is not liable to be convicted of both offences. 41Mr Merhi said that his work under the supervision and direction of Mr Sid Merhi and Mr Kassis for the 36 months prior to June 2013, fell within the exception provided in section 13(1) (b). That is, that he had done the work "under the supervision, and subject to the direction, of the holder of an endorsed contractor licence or supervisor certificate authorising its holder to supervise that work." Mr Sid Merhi and Mr Sam Kassis both had endorsed contractor licences. Mr Merhi submitted that section 13(1) (b) should stand alone from provisions of section 4 and 12 of the Act. It provided an exception in which Mr Merhi could be considered to have been lawfully engaged in performing residential work. Accordingly he could be considered to have a wide range of building experience lawfully engaged for a period of two years. He was entitled to have a builders contracting licence. Respondent's submissions 42The Respondent made oral submissions. 43The Respondent referred to the Instrument of July 2013. Mr Merhi had the appropriate qualifications. The work undertaken by Mr Merhi was in a wide range of building work. The Respondent noted that Mr Merhi had rendered invoices and had been paid for the work. The remaining issue was whether Mr Merhi had been employed or lawfully engaged during the period relied upon. 44The Respondent relied on the internal review findings that Mr Merhi had worked as a sub-contractor for the 36 month period. He had not been employed. 45Further the Respondent pressed that Mr Merhi had not been lawfully engaged. He had worked in breach of the section 4 requirement that contractors be licensed and the section 12 requirement that an individual undertaking residential work be licensed. 46The Respondent submitted that section 13 did not provide an exception to the prohibitions in sections 4 and 12 - of which Mr Merhi had been in breach. It may have been that Mr Merhi had not worked in breach of section 13 as well as he had been supervised. Tribunal's finding of facts 47The tribunal sets out the following facts relating to Mr Merhi's work history. 48On 17 July 2012 Mr Merhi obtained his Certificate III in Carpentry and Certificate IV in Building and Construction. He holds the required qualifications under the Instrument. 49From March 2010 to September 2010, inclusively, Mr Merhi worked as a leading hand/Carpenter full-time subcontractor for Sid Merhi. This was a period of eight months. 50From February 2011 to May 2011, inclusively, Mr Merhi worked for Sid Merhi as a leading hand and full-time subcontractor. This was a period of four months. 51From July 2011 to June 2013, inclusively, Mr Merhi worked for Sam Kassis full-time and as a subcontractor as a carpenter and leading hand. This was a period of 24 months. 52Mr Merhi was financially remunerated for this work - in accordance with the requirement of the July 2013 Instrument. 53The tribunal finds that Mr Merhi was not an employee during this 36 months of employment. That finding is based upon the declarations made by Sid Merhi and Sam Kassis that that Mr Merhi had been subcontractor; the letter from Mr Merhi's accountant indicating that he was a subcontractor; the evidence of the invoices presented by Mr Merhi to Mr Merhi and Mr Kassis and Mr Merhi's own statements. 54During these times Mr Merhi did not hold a contractor licence. He was not licensed to undertake residential building work. Findings of Law and Fact 55The tribunal has found that Mr Merhi was not employed by Mr Sid Merhi or Mr Kassis prior to June 2013. 56Mr Merhi must meet the requirement to have been employed or lawfully engaged to meet the definition of experience set out in the Instrument relevant to clause 28 of the Home Building Regulation. 57Lawfully engaged means to be engaged in accordance with the Act. 58The tribunal has found that Mr Merhi was not the holder of a contractor licence when he worked for Mr Sid Merhi or Mr Sam Kassis as a sub-contractor. Section 4 also makes it unlawful for anyone to engage an unlicensed contractor as a contractor. Accordingly Mr Merhi was in breach of section 4 of the Act and not lawfully engaged at this time. 59Further when Mr Merhi undertook residential building work for Mr Sid Merhi and Mr Sam Kassis as a contractor at these times - he did not hold a licence to do so. He was in breach of section 12. He could not have been considered lawfully engaged at these times. 60Mr Merhi may not have been in breach of section 13 when he worked as a sub-contractor for Mr Sid Merhi and Mr Sam Kassis under their supervision and direction. However the fact that Mr Matthew Merhi is likely not to have been in breach of section 13 does not remedy the fact that he was in breach of section 4 and section 12 when engaged by Mr Sid Merhi or Mr Sam Kassis. Nor does it remedy the fact that Mr Sid Merhi and Mr Sam Kassis may have been in breach of section 4 for engaging Mr Matthew Merhi when he did not hold a contractor licence. 61The tribunal considers the fact that Mr Merhi worked during the 36 month period as an unlicensed contractor means that he cannot have been considered to be have been lawfully engaged during that time and cannot satisfy the definition of "experience" during that time. Decision 62Accordingly the tribunal affirms the Respondent's decision that Mr Merhi did not meet the 24 months experience requirement as he was neither an employee nor lawfully engaged during this time. 63The tribunal affirms the Respondent's decision to refuse a licence to Mr Merhi. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 02 December 2014