Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Whitley v Director General, NSW Fair Trading [2015] NSWCATOD 155 Hearing dates: 18 August 2015 Date of orders: 23 December 2015 Decision date: 23 December 2015 Jurisdiction: Occupational Division Before: J McAteer Senior Member Decision: (1) The decision under review is set aside. Catchwords: FIT and proper person – contractor licence - alleged improper conduct – whether allegations made out on evidence – nature of allegations – circumstances of allegations- fit and proper in absence of breach Legislation Cited: Administrative Decisions Review Act 1997 Home Building Act 1989 Oaths Act 1900 Cases Cited: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 46 FLR 409 Saboune v Department of Finance and Services [2013] NSW ADT 71 Holt v Commissioner for Fair Trading [2015] NSWCATOD 130 Category: Principal judgment Parties: William Andrew Whitley (Applicant) Director General, Department of Finance and Services NSW Fair Trading (Respondent) Representation: Counsel: S Tully (Applicant) Solicitors: Heard McEwan Legal (Applicant) Office of Fair Trading (Respondent) File Number(s): 1520112 Reasons for decision 1. This is an application for an administrative review of a decision of the respondent Public Sector Agency, (the administrator / respondent) which was made on 1 June 2015 under section 64 of the Home Building Act 1989. (the ' HB Act'). Background 1. The applicant has held an endorsed contractor licence in the categories of plumbing, drainage, gas-fitting and roof plumbing since February 1984. In addition the applicant has held a contractor licence in the same categories as a partner with three other individuals from 1987 to 2007. 2. The respondent issued a Notice to Show Cause under section 61 of the HB Act on the applicant in February 2015. This Notice followed a Departmental investigation into licensing lending practices the respondent found that the applicant had permitted another person (Mr 'K') to carry out specialist work and use the contractor licence held by the applicant. Mr 'K' was unlicensed to carry out specialist work. 3. In the Notice to Show Cause, the respondent identified seven instances where in their view the applicant was not a fit and proper person to hold a contractor licence based on evidence of seven different job sites. These seven instances also lead to preliminary findings by the respondent that the applicant was guilty of improper conduct within the terms of the HB Act. In addition there was a further preliminary finding in respect of Mr 'K' providing a quotation to a member of the public for specialist plumbing and drainage work. 4. The applicant responded to the Notice to Show Cause by a written response / submissions dated 4 March 2015. The respondent issued a Notice of Decision under section 64 of the HB Act on 1 June 2015. In that decision the respondent determined that the applicant was not a fit and proper person to hold a contractor licence and in addition that the applicant was guilty of improper conduct within the provisions of section 51 (1) (a) of the HB Act. 5. In determining to take disciplinary action in accordance with the provisions of section 62 (f) of the HB Act, the respondent cancelled the applicant's authority (licence) and disqualified the applicant for a period of 5 years in respect of 1. Holding any contractor licence, supervisor certificate or tradesperson certificate, 2. Being a member of a partnership, or an officer of a corporation that is a member of a partnership, that is the holder of a contractor licence, 3. Being an officer of a corporation that is the holder of a contractor licence. 1. The applicant did not seek an Internal Review of the decision of 1 June 2015, but instead elected to lodge an application for administrative review with the Tribunal on 22 June 2015. 2. In the absence of an Internal Review, the Tribunal was obliged to consider the application in accordance with the provisions of section 55 (4) of the ADR Act. (4) However, the Tribunal may deal with an application for the administrative review of an administratively reviewable decision even though the applicant has not duly applied for an internal review to which the applicant was entitled if the Tribunal is satisfied that: (a) the applicant made a late application for the internal review in circumstances where the person dealing with the application unreasonably refused to consider the application and the application to the Tribunal was made within a reasonable time following the administratively reviewable decision of the administrator concerned, or (b) it is necessary for the Tribunal to deal with the application in order to protect the applicant's interests and the application to the Tribunal was made within a reasonable time following the administratively reviewable decision of the administrator concerned. 1. The application was returnable on 30 June 2015, at which time the Tribunal determined to deal with the matter in accordance with section 55 (4) (b) of the ADR Act. In addition the applicant had sought a stay of the decision of the respondent, which was also determined on 30 June 2015. 2. The Tribunal after hearing from the parties and considering the matter determined to grant a stay on strict conditions. In effect the applicant has continued to work with his contractor licence since that time, as long as he complied with the conditions which related to notifying the respondent of all jibs undertaken under the licence. At the conclusion of the hearing the stay continued. The respondent's reasons for issuing the Notice to Show Cause. 1. There were two sets of grounds for the disciplinary action. The Fit and Proper Ground section 56 (b) of the HB Act 1. The respondent submitted in the Notice to Show Cause that the applicant made a false declaration in respect of seven Certificates of Compliance for plumbing and drainage work at seven job sites in southern Sydney. A Certificate of Compliance is a document which the Licence 'signs off' in order to attest to the standard and compliance of the plumbing / drainage work. These certificates for part of the administration, compliance and audit obligations and functions of the administering Department and the Licence holder. 2. In each of the seven grounds asserted by the respondent, it was alleged that whilst the applicant declared that he had carried out the plumbing and drainage work, that work was neither contracted by the applicant, nor was it carried out by the applicant. 3. In addition by making what the respondent referred to as a false declaration, the respondent submitted that the applicant was not a fit and proper person to hold a contractor licence. The Improper Conduct Ground section 56 (c ) of the HB Act. 1. In respect of the seven jobs sites referred to at paragraph12 (above), the respondent submitted that the applicant was guilty of improper conduct within section 51 (1) (a) of the HB Act for committing an offence against section 46A of the HB Act. The actual 'offending' behaviour was the allegation that the applicant had permitted Mr 'K' to use the applicant's contractor licence so that 'Mr 'K' could carry out plumbing and drainage work. 2. There was a further ground in that the respondent alleged the same breaches, but that on that occasion the breach was based on the permitting of Mr 'K' to use the licence to obtain a quote for specialist plumbing and drainage work, rather than the actual work. The relevant legislation 1. Sections 57 and 62 of the HB Act set out the grounds for taking disciplinary action and the nature of disciplinary action. 57 Grounds for taking disciplinary action against holder of a supervisor or tradesperson certificate The Secretary may take disciplinary action under section 62 against the holder of a supervisor or tradesperson certificate on any of the following grounds: (a) that the holder is not entitled to hold the certificate, (b) that the holder is not a fit and proper person to hold the certificate, (c) that the holder is guilty of improper conduct, (d) that the holder is not capable of doing all or part of the work that the certificate authorises the holder to do, (e) that the holder has failed to comply with a condition of the certificate imposed by a determination under this Part, (f) that the certificate was improperly obtained, (g) that the Secretary has become aware of information about the holder that, if known at the time the application for the certificate was determined, would have been grounds for refusing the application. 62 Disciplinary action that may be taken by Secretary If, after compliance with this Division, the Secretary 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 Secretary 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 Secretary, 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. 1. Section 8B3 of the HB Act set out the role of the Tribunal on review. 83B Administrative reviews by Tribunal (1) An applicant for the issue, alteration, renewal or restoration of an authority aggrieved by any decision of the Secretary relating to the application may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the decision. (2) The holder of an authority aggrieved by any decision of the Secretary to alter an authority or to cancel a provisional authority may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the decision. (2A) The holder of a contractor licence aggrieved by a decision of the Secretary to suspend the contractor licence under section 22A, 22B or 61A may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the decision. (3) A person aggrieved: (a) by a decision made by the Secretary under Part 4 (Disciplinary proceedings) to impose a penalty or to cancel or suspend an authority, or (b) by any other decision made by the Secretary under that Part that is prescribed by the regulations, may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of that decision. (4) For the purposes of this section, the Secretary is to be taken to have refused any application that has not been withdrawn if the Secretary has not served on the applicant notice of the decision on the application: (a) within 40 days of its being lodged with the Secretary, or (b) if the Secretary and the applicant agree on a longer period—within the longer period after its being so lodged. 1. In addition, the Administrative Decisions Review Act 1997 (the ADR Act), provides for administrative review by the Tribunal, in accordance with section 83B (2A) of the HB Act (above). Section 55 of the ADR Act provides that: 55 Making of applications (1) An application for an administrative review under this Act of an administratively reviewable decision may only be made by an interested person. (2) Subject to enabling legislation, an application is to be made in the time and manner prescribed by the procedural rules. Note. The fees payable for applications are also prescribed by the regulations under the Civil and Administrative Tribunal Act 2013. (3) If the interested person was entitled to seek an internal review of the administratively reviewable decision, an application may not be made unless the person has duly applied for such an internal review and the review is taken to have been finalised under section 53 (9). (4) However, the Tribunal may deal with an application for the administrative review of an administratively reviewable decision even though the applicant has not duly applied for an internal review to which the applicant was entitled if the Tribunal is satisfied that: (a) the applicant made a late application for the internal review in circumstances where the person dealing with the application unreasonably refused to consider the application and the application to the Tribunal was made within a reasonable time following the administratively reviewable decision of the administrator concerned, or (b) it is necessary for the Tribunal to deal with the application in order to protect the applicant's interests and the application to the Tribunal was made within a reasonable time following the administratively reviewable decision of the administrator concerned. (5) In determining whether a late application for internal review was unreasonably refused or whether an application to the Tribunal was made within a reasonable time for the purposes of subsection (4), the Tribunal is to have regard to: (a) the time when the applicant became aware of the making of the decision, and (b) in a case to which subsection (4) (a) applies—the period prescribed by or under section 53 for the lodging of an application for an internal review, and (c) such other matters as it considers relevant. (6) The Tribunal may also deal with an application even though the applicant has duly applied for an internal review of the decision to which the application relates, and the review is not finalised, if the Tribunal is satisfied that it is necessary for the Tribunal to deal with the application in order to protect the applicant's interests. The hearing 1. The matter was heard on 18 August 2015 over one full day. Both parties were legally represented. The evidence Applicant's Evidence. 1. The applicant tendered three items of written evidence. 1. Exhibit 'A 1' was an affidavit of William Whitley affirmed 28 July 2015. 2. Exhibit 'A 2' was an affidavit of M Whitley affirmed 28 July 2015. 3. Exhibit 'A 3' was a statement of Mr 'K' dated 26 July 2015 Evidence of W Whitley. 1. In addition to Exhibit 'A 1', the applicant gave evidence at the hearing. Exhibit 'A 1' was adopted by the applicant. His evidence in chief was that he had been involved in plumbing since 1980. During his apprenticeship he was supervised by his father in law. His father in law developed a medical problem with his leg and in effect handed over the business in the mid to late 1980's to the applicant. The father in law retired and the applicant obtained the equivalent of a contractor's licence, which he understood to be sufficient to continue to run the business. 2. Some of those who had worked with the applicant and his father in law in the business formed a partnership and went to the relevant authority at that time (the MWSDB in respect of plumbing), and organised the relevant licence / authority for a partnership. The evidence was that the son of the father in law, Mr 'K' and a third person 'J.B.' worked with the applicant on occasion in this partnership. It appears that the partnership effectively ceased to operate after approximately ten years, as various individuals went their own way and moved away geographically from each other. 3. The applicant's written and oral evince was that he knew Mr 'K' for close to thirty years He believed that Mr 'K' was doing things correctly and that he had retained his contractor licence or journeyman's ticket over that time. 4. The applicant gave evidence that he was contacted by Mr 'K' needing some work. The applicant was by this time living in the Illawarra area and Mr 'K' proposed working in Sydney. The applicant's evidence was that they worked together on two plumbing sites in Matraville between 2009 and 2014. 5. In oral evidence the applicant said that he booked all of the inspections for the jobs that Mr 'K' worked on (other than the Matraville sites), being sites / jobs for which he spoke by telephone about the supervision and progress of Mr 'K's work. 6. However later in evidence (by way of clarification) the applicant said that Mr 'K' booked all of the inspections for the other sites. The applicant's evidence was that he personally might have booked one inspection, but he could not attest that with great certainty. 7. The witness gave evidence as to what was the prevailing industry standard as to completing the work / authorisation certificate. The witness had received a call from Fair Trading in respect of a job at Sandringham (in Sydney). He went to an interview with the Fair Trading Inspector. The witness gave evidence that he never received a copy of the transcript of that interview with the Inspector. 8. The witness gave evidence that had he known that Mr 'K' no longer had a licence, he would never have agreed to supervise and sign off on the work, irrespective of his views about the high standard of Mr 'K's general plumbing work. 9. The witness gave evidence about the changed and difficult personal circumstances of Mr 'K' in the last 10 to 15 years and how there were money issues for him. His evidence was that Mr 'K' wanted to know whether he could start up with the applicant again like they were in the 1980's and 1990's. His evidence was that the only job that he actually worked on site with Mr 'K' during the disputed period was the job at Matraville. 10. His evidence was that he denied ever receiving and money, payment in kind or benefit from any of the jobs involving Mr 'K' in any capacity after 2007, relating to the alleged 'misuse' by Mr 'K' of the contractor licence. 11. When asked about the nature of the work with Mr 'K' the witness said that he helped him with the drawings / plumbing plans. 12. In 2005 the applicant had discussions with his wife about letting the contractor licence go, meaning giving it up. The applicant's evidence was that he couldn't recall his wife saying that she would let it go. (His wife taking responsibility of the paperwork and administration of the business). 13. The applicant gave evidence that there were significant personal matters occurring in his own family life, with various health issues relating to his adult / young adult children. 14. His evidence was that he never had received a complaint from a consumer and had no concerns with the quality of Mr 'K's work, nor was he aware of any concerns by the Department. 15. However the applicant did concede in his evidence that there was a growing number of instances of work (including work that he had responsibility for) being issued with rectification notices. 16. The witness gave evidence about some of the details of his personal circumstances. It is not necessary in these open reasons to reproduce significant details of that evidence as the evidence was not challenged and has only a partial bearing on the issue for consideration. In addition the privacy of third parties who are only indirectly linked to the import of these proceedings should, in my view, be protected. 17. The substance of the applicant's evidence was that his very elderly mother lives with him, his wife suffers from a chronic neck problem which prevents her seeking independent work, but she runs the plumbing business by doing all the administration from home. 18. Both his children have health issues (see paragraph 34) and are partially dependent on his income. At least 5 persons are therefore wholly or partially dependent on the income that the applicant generates through his work under the relevant licence. As he is the sole 'breadwinner' his licence is very important to him. 19. In cross examination the applicant was questioned about the supervision of the seven jobs. In respect of Mr 'K' contacting him about work, as the applicant was no longer Sydney based, he believed n hindsight that he just thought that it would have been easier for him to have gone and found a Sydney based supervisor. 20. The applicant could not recall whether he went to many of the seven Sydney based jobs, but stated that he was certain that he went to one of them. Whilst in his record of interview with the Inspector at Q 164, it appeared that he indicated some reservations about the arrangement, he denied in cross-examination that he actually had reservations. 21. When asked directly whether Mr 'K' was his employee, the applicant answered 'No'. When asked whether Mr 'K' had ever been an employee the answer was 'No.' 22. Concerning his knowledge about licencing requirements, the applicant completed aspects of his evidence in chief and affidavit evidence. He recalled how he went to the Water Board in the 1980's and was told that the Contractor's Licence was sufficient and that his understanding was that everything was OK. 23. The applicant was taken through the Respondent's Certificate (exhibit R-2) concerning the licencing history of Mr 'K'. The applicant's evidence was that he was unaware that Mr 'K's contractor licence and tradesperson certificates had both lapsed. 24. The applicant conceded in cross examination that as the nominated supervisor he had certain obligations to check other licences under that supervisor's licence. He admitted that he failed to check whether Mr 'K' had a contractor licence, and used language that he 'is totally guilty of not checking.' 25. The applicant's evidence was that he understood that what he was doing was perfectly legal and that he has made 'book keeping' errors. In defence he submitted that the Department (in his view) should have detected the issues in 2009, as the first project was in December 2009 and the seventh was in April 2014. 26. The applicant in evidence indicated his lack of understanding of the various requirements and regimes and had tried to keep up with the changes. The respondent reminded the applicant in cross-examination that Fair Trading had been the Licencing body since 1991 not the Water Board, even if the Water Board had been the Certifying body in respect of the quality of the work up until 2012. That aspect was also now with Fair Trading. 27. When asked further as to his knowledge of Mr 'K' the applicant indicated that he was unaware that he was unable to obtain home warranty insurance due to his only holding a Tradespersons certificate. Evidence of witness Mr 'K' 1. The witness gave oral evidence before the Tribunal, originally assisted by an interpreter. However it appeared that the witness's oral language was a hybrid of two languages and the interpreter was unable to provide any significant assistance. However with some assistance the Tribunal was able to extract testimony from the witness by guiding the relevant parties in their approach and technique. I am satisfied that the witness's answers are sufficiently cogent so as to form part of the evidence in these proceedings. 2. His evidence was that he never had a plumbing licence after his earlier licence expired. He did not have work for a long time due to two operations that he underwent. 3. He said that he had clients with a Chinese background who gave jobs to him. If he needs help on a matter that he worked with another plumber on he would ask questions. In respect of the applicant, when he worked with him he would always ask questions of him if there was anything that ne needed advice or help with, because 'he's the main plumber'. 4. The witnesses' evidence was that there were no consumer complaints against him, and that when he went to the interview with the Department (in respect of the matters leading to these proceedings), he was somewhat confused. When asked why this was the case, his evidence was that he felt sick, there were three people talking at him and that he was having trouble with his eyes. 5. The witness gave evidence that he only ever paid Andrew (the applicant) for materials (approximately $3,000.00 in respect of the jobs). His evidence was that he had never dealt with people like the Fair Trading Investigators before and said that such people were 'strange' and that none of the people he had met in the plumbing industry were like that. 6. His evidence was that he told the investigators / inspectors 'a hundred times' what the situation of Andrew's involvement was, and that it was never understood by them. The witness indicated that he was the one who called and tried to make bookings for the inspections. His evidence was that broadly he didn't understand the questions being put to him by Fair Trading during the investigation. 7. The witness gave evidence that sometimes Andrew came to the job site, and other times the supervision occurred over the telephone. The witness was asked to explain in cross-examination one of the seven jobs (folio 102 from the Respondent's section 58 documents). That material related to a Granny Flat plumbing job. The evidence was that he did not perform that work, 'only the main house at Bexley, not the granny flat'. 8. At the conclusion of his evidence the Tribunal asked the witness whether he could read and write English. The answer given was, 'not really'. Evidence of M Whitley 1. Mrs Whitley gave evidence during the proceedings in addition to her affidavit affirmed 28 July 2015. Her evidence was broadly consistent with the applicant's evidence. The main departure was her knowledge of the circumstances of the cancellation of the Contractor's Authority. The witness gave evidence that she cancelled the Contractor's Authority in 2007, by in effect not renewing it. The basis for this was that the nature of the work being that the applicant was no longer engaging other tradespersons and as a result it was no longer needed. 2. Her evidence was that she could not recall whether in 2007 whether she advised the applicant, but on 2 October 2014 she told him directly after the applicant got off the telephone from the Fair Trading Investigator. 3. Mrs Whitley was responsible for the bookkeeping side of the applicant's plumbing business and as a result was responsible for cancelling or renewing authorities, in addition to other payments, invoicing, receipting etc. 4. The witness gave evidence about the applicant's work ethic, character, integrity and the vital role that he and his income play in supporting their highly dependent family unit. The witness gave further evince about the Fair Trading investigation. Her evidence was that whilst she was present during some of the process she was not permitted to speak or contribute to the responses. The applicant's memory was (in her evidence) 'not that great', and there were many things which the applicant did not know the answer to, but that she knew the answers and could have pointed out the facts of particular matters. This knowledge was based on her role and responsibility in the non 'trades work' side of the business. 5. In cross-examination the witness was asked about the 2007 lapsing of the Contractor Licence. In respect of what knowledge she believed the applicant would have had about these renewals (as he was required to sign the) the witness gave evidence that ' he signs what I put in front of him'. 6. The respondent did not call any persons to give evidence in respect of the section 58 documents or other matters. Submissions 1. The applicant relied on written submissions and drew the Tribunal's attention to the case of Saboune v Department of Finance and Services [2013] NSW ADT 71. 2. In that case at paragraph 91 Judicial Member Huntsman provides a breakdown of all of the relevant case law on the notion of fit and proper, when having regard to this and similar legislative contexts. 91. The respondent contends that the applicant is not a fit and proper person. In considering whether the applicant is a fit and proper person to hold a contractor licence the tribunal has considered guidance offered by other tribunal decisions. A useful review of the authorities was provided in the case of AJO v Director-General Department of Transport [2012] NSWADT 101 (25 May 2012) at paragraphs 24 to 35: 24.Assessment of whether a person is fit and proper to be the holder of a licence is different from, but related to, an assessment of whether a person is of good character. 25.In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321,Chief Justice Mason explained that, at 380: '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.' Toohey and Gaudron JJ said 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." 26.A person's fitness is to be gauged in the light of the nature and purpose of the activities that the person will undertake. In Hughes and Vale Pty Ltd v New South Wales (No. 2) [1955] HCA 28; (1955) 93 CLR 127 the High Court said (at 156-7): "The expression 'fit and proper' is of course familiar enough as traditional words when used with reference to offices and perhaps vocation. But their very purpose is to give the widest scope for judgment and indeed for rejection. 'Fit' (or 'idoneus') with respect to an office is said to involve three things, honesty, knowledge and ability ... When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and that it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances." 27.InSobey v Commercial and Private Agents Board 20 SASR 70 Walters J said: "In my opinion what is meant by that expression is that the Applicant must show not only that he is possessed of a requisite knowledge of the duties and responsibilities evolving upon him as the holder of a particular licence ... but also that he is possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public ... as a person to be entrusted with the sort of work which the licence entails." 28.Fitness and propriety are flexible concepts. A consideration of whether a person is fit and proper involves an assessment of their knowledge, honesty and ability in the context of the role they are seeking to undertake. Thus in Obradovic -v- Commissioner for Fair Trading, Office of Fair Trading (GD) [2006] NSWADTAP 18 the Appeal Panel agreed that a formerly licenced building contractor should have his application for a new licence refused, despite there being no evidence that he was dishonest or of bad repute. Evidence that he had been extremely tardy and intransigent in dealing with customer complaints, and the regulator, when he held a licence, was sufficient to conclude that he was not fit and proper for the role. In that case the licensing scheme was among other things, designed to protect consumers and to provide them with adequate means of redress against licensed contractors. In Bond the assessment occurred in the context of whether the Applicant was a fit and proper person to hold a licence under the Broadcasting Act 1942 (Cth). 29.InSaadieh v Director General, Department of Transport [1999] NSWADT 68, Hennessey DP set out the factors to be taken into account in determining a person's suitability and fitness to obtain a taxi authority. They are: the nature, seriousness and frequency of any criminal offences for which the Applicant has been arrested or convicted; the Applicant's reputation in the community; and the likelihood that the Applicant will re-offend, be the subject of further complaints or commit further traffic offences. 30.In Director General, Transport NSW v AIC (GD) [2011] NSWADTAP 65 the Appeal Panel, at [37] the Appeal Panel drew attention to the role public interest considerations play in the assessment of fitness and propriety. The courts have emphasised the connection that assessment of repute, fitness and propriety have in a regulated context with public interest considerations. Repute, fitness and propriety involve concepts that should not be 'narrowly construed or confined' and may extend to 'any aspect of fitness and propriety that is relevant to the public interest' (Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 (26 July 1990) at [64] per Mason CJ. .... The comments of Kirby P in Pillai v Messiter [No.2], quoted above, are an example of this. 31.The discretion vested in a decision maker in determining whether a person is fit and proper, in any given context, was said by the Full Court of the Federal Court in Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 589 at 389, per Northrop, Miles and French JJ, to "give wide scope for judgement and allow broad bases for rejection." 32.As was made clear by Toohey and Gaudron JJ in Bond, issues of character and reputation may play a determinative role in deciding whether a person is fit and proper. Their Honours also clearly highlighted that there is a difference between the two. They explained that an assessment of character is relevant because it is an indicator of a person's likely future conduct when considering how a person might act in the context of the role they are seeking to undertake. Reputation on the other hand, provides an indication of the public perception of future conduct in that role. In Re T and the Director of Youth and Community Services [1980] 1 NSWLR 392, Waddell J explained, at 393: 'A distinction must be drawn between "repute" or "reputation" and "character" or "disposition". The word "character" is sometimes used as meaning a person's reputation, but "reputation" is not ordinarily used to mean character. The distinction has been referred to in many decisions of the courts." In Melbourne v The Queen [1999] HCA 32; [1999] 198 CLR 1 at 15 McHugh J explained: "... character refers to the inherent moral qualities of a person or what the New Zealand Law Commission has called "disposition - which is something more intrinsic to the individual in question". It is to be contrasted with reputation, which refers to the public estimation or repute of a person, irrespective of the inherent moral qualities of that person." 33.In Ex Parte Tziniolis; Re Medical Practitioners Act (1966) 67 SR (NSW) 448 Walsh JA, at 450, said that in determining questions of character: "... the court is required to consider matters affecting the moral standards, attitudes and qualities of the Applicant and not merely to consider what is his general reputation." That case was concerned with an application for registration of a medical practitioner. His Honour went onto explain that the Court was entitled to inquire into personal misconduct, as well as professional misconduct, in considering whether the Applicant was a man of good character: "... whilst recognizing that there may be some kinds of conduct deserving of disapproval which have little or no bearing on whether or not it shows the Applicant for registration as a medical practitioner is a person of good character. In this respect, I think, that some assistance can properly be obtained as to the mode of approach to be made from the observations made in cases where the was whether or not that a person was fit and proper to be a barrister, such as those in Ziems v Prothonatory of the Supreme Court of NSW [1957] HCA 46; (1957) 97 CLR 279." Thus, as with fitness and propriety, assessment of character is to be made in the context of the nature and purpose of the activities that the person is seeking to undertake. In Director General, Department of Transport v Z (No.2) (GD) [2002] NSWADTAP 37 the Appeal Panel explained: 'Good repute' refers to the way reasonably-minded people assess an individual's current reputation, with reasonably precise knowledge of those matters that put the person's reputation in doubt. The fact that the person produces evidence from witnesses who vouch in general terms for the person's reputation cannot be conclusive. Equally, care must be taken, as we see it, not to use the 'good repute' requirement as a way of bringing into consideration stereotypes or assumptions which offend, for example, against human rights or anti-discrimination standards. 1. The applicant provided a large amount of evidence in support of the notion that he was a fit and proper person (both within and beyond his occupation). Submissions were made that the applicant and his wife gave evidence in a frank and candid manner. Whilst aspects of the applicant's evidence appeared on one assessment stubborn and unaccepting, (eg: his constant references to 'Journeyman's tickets, the Board etc), this was in no way indicative of an attempt to be evasive or distract the Tribunal from the facts and matters in issue. 2. It was submitted that a number of errors were committed by the applicant, but there were based on the long personal history of the protagonist (Mr 'K'), a genuine desire to assist, and a misguided acceptance that the requisite skills were the major component of what required monitoring in respect of trade work in a consumer protection environment. 3. The applicant submitted that the following facts were now uncontroversial. Mr 'K' was not licenced, the applicant was unaware of this, and that the applicant's contractor licence had expired, and the he himself was unaware of this. 4. The applicant submitted that Mr 'K''s evidence should be treated with caution. It as also submitted that there were no false declarations made by the applicant (when one has regard to the terms of the declaration). It was submitted by the applicant that the section 46A offence seemed to have fallen away. In respect of other offences, the evince was that Mr 'K' did the contracting so no offence attached to the applicant. 5. In the applicant's submission the applicant had not been sufficiently dishonest so as to not be a fit and proper person, when one has regard to the matters set out in Saboune (above). In their view section 25 of the Oaths Act 1900 had not been contravened. A person : who wilfully and corruptly makes and subscribes any such declaration, knowing the same to be untrue in any material particular, shall be guilty of an indictable offence and liable to imprisonment for 5 years. 1. It was further submitted that there was no risk of possible consumer detriment, as Mr 'K' is no longer able to carry on plumbing work, and would not be further engaged by the applicant. The applicant has undergone self-education in the areas of his obligations and responsibilities as a Licence holder, has contrition and acknowledges his errors. 2. Although seven jobs were identified, the applicant took action to intervene as soon as possible. Further submissions were made as to the family circumstances of the applicant, in so far that the harshness and impact of the decision. In respect of penalties the applicant submitted that there should be none imposed but that section 62 (d) of the HB Act may provide some assistance to the Tribunal. 62 Disciplinary action that may be taken by Secretary If, after compliance with this Division, the Secretary 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 Secretary 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 Secretary, 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. (Emphasis added) 1. The respondent submitted that there were two main areas of concern. (1) was the improper conduct that they submitted was identified, and (2) the offence that followed from that conduct. 2. The respondent submitted that the alleged offence under section 46 A of the HB Act still persists. In their submission the contractor licence expired in 2007, the Tradespersons certificate (of Mr 'K') expired in 2001, and it was incumbent on the applicant to check these things. Whilst the applicant submitted that telephone supervision was permissible, the respondent submitted that it was not. As the conduct involved residential building work the regulator is rightly concerned about consumer protection, and relies on offences under section4, section 16 and section 46A of the HB Act. 4 Unlicensed contracting (1) A person must not contract to do: (a) any residential building work, or (b) any specialist work, except as or on behalf of an individual, partnership or corporation that is the holder of a contractor licence authorising its holder to contract to do that work. Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. (2) The holder of a contractor licence who has contracted to do any residential building work must not contract with another person for the other person to do the work (or any part of the work) for the holder unless the other person is the holder of a contractor licence to do work of that kind. Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. (3) The holder of a contractor licence must not contract with another person for the other person to do any work (or part of any work) for the holder for which insurance is required under this Act unless the other person is the holder of a contractor licence to do work of that kind. Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. 16 Obligations of holders of contractor licences The holder of a contractor licence must ensure that, when residential building work, or specialist work, for which the contractor licence authorises the holder to contract is being done by or on behalf of the holder, the work is done: (a) by the holder of an endorsed contractor licence, or of a supervisor or tradesperson certificate, authorising its holder to do the work, or (b) under the supervision, and subject to the direction, of the holder of such an endorsed contractor licence or supervisor certificate, but only if the work is done so as not to contravene a requirement made by or under this or any other Act. Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. 46A Lending of authority prohibited (1) The holder of an authority must not let out, hire or lend the authority to any other person or permit any other person to use the authority. Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. (2) A court that convicts a person for an offence under this section is to order the cancellation of the authority concerned. The authority is cancelled on the making of the order. Findings of Fact 1. The Tribunal finds after a consideration of all of the evidence and submissions provided in this matter, that the applicant did not lend his authority to Mr 'K'. and as a result there is no breach of section 46A of the Act. 2. What is less clear is whether the applicant complied with his obligations to check both his own status (in respect of the expired Contractor's Authority), and Mr K's tradesperson's certificate. Notwithstanding the applicant's submissions that there can be no breach of section 16 of the HB Act on the evidence, (as the applicant was not contracting), in my view it appears that the applicant should have possessed the requisite knowledge (prong of the fit and proper test), in order to ascertain that the work that he was supervising was authorised in accordance with the terms of the H B Act. 3. Although I do not make a positive finding that there was a breach of section 16 of the HB Act, what is clear is that at the relevant time, the applicant failed to conduct what are in my view the necessary checks before engaging in an arrangement (even if it was without remuneration or involved contracting). This however is no fatal to the applicant's application to the Tribunal. This position in my view is corroborated and admitted to by the applicant when one has regard to the matters acknowledge at paragraph 46 (above). 4. As the section 16 matter falls away, as a result there can also be no positive finding in respect of section 4 of the HB Act, on the evidence and material before the Tribunal. Fit and Proper 1. An analysis of the relevant case law on the notion of fit and proper is set out at paragraph 64 above. In that analysis the relevant leading cases are referred to. 2. Notwithstanding the lack of any specific breach of the HB Act, the issue of the applicant's appropriate level of knowledge was a live issue during the course of the investigation, the administrative decision and these proceedings. 3. The notion of fit and proper in respect of trade qualifications was recently considered again by the Tribunal in the case of Holt v Commissioner for Fair Trading [2015] NSWCATOD 130. In that case the Tribunal had made a positive finding of a breach of the HB Act, and considered whether the applicant was fit and proper to hold the licence / authority. 4. At paragraph 54 of Holt Senior Member Scahill makes the following observations: 54. The Respondent referred to the matter of Massoud as similar to Mr Holt's circumstances, warranting a finding of not fit and proper and justifying removal of licences and authorities. In that matter, Mr Massoud, a licensed contractor had provided false references for 2 people he did not know in 1998 and 2002. When he applied to renew his own contractor licence in 2005, it was refused on the basis of his previous false references in 1998 and 2002. The circumstances has been subject to ICAC review. On review of the Commissioner's decision, the Tribunal affirmed the Commissioner's decision that Mr Massoud was not a fit and proper person and his contractor licence was refused. See Massoud v Commissioner for Fair Trading [2006] NSWADT 59. 55. This Tribunal considers that Mr Massoud's actions were similar to Mr Holt's actions. However Mr Massoud had twice, over a period of 4 to 5 years, provided false references. In this matter, Mr Holt has done this on one occasion only and has not been subject to ICAC proceedings. This Tribunal distinguishes Mr Holt's circumstances from those of Mr Massoud. 56. The Respondent has submitted that it is only 21/2 years since Mr Holt engaged in the deceptive behaviour in April 2013. In the matter of Bouchahine there had been an elapse of 7 years, contributing to the Tribunal's decision that the Applicant was now fit and proper. The Tribunal does not accept however that the lapse of time in itself is a necessary factor in rehabilitation. Rehabilitation can theoretically happen over short or long periods. 57. Accordingly the Tribunal is satisfied from the evidence that Mr Holt is now a fit and proper person to hold a supervisor certificate. 1. In my view, whilst the applicant appeared lacking in the requisite knowledge to be fit and proper to hold the relevant authority (see comments at paragraphs 75-78 above), it is less clear that such a situation persists at the conclusion of these proceedings. Unlike the case of Holt and the examples cited there, this matter has not resulted in a positive finding against the applicant. 2. On the basis of his contrition, acknowledgement of the lack of attention to detail in respect of the administration and compliance issues of his business, the applicant appears to have endured an extremely stressful but enlightening experience. In addition, the fact that these proceeding have placed the applicant under severe strain and uncertainty to his future, in my view, further distance this case from those referred to in Holt. 3. It would therefore appear consistent with those authorities and having regards to all of the evidence and material before the Tribunal, that the no further conditions or sanctions under section 62(d) of the HB Act are necessary. Conclusion 1. It follows that the correct and preferable decision is to set aside the decision of the respondent, and to take no further action. Orders 1. The decision of the Respondent dated 1 June 2015 is set aside. ********** 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: 23 December 2015