Borovina v Commissioner for Fair Trading (GD)

[2007] NSWADTAP 44

Appeal Panel - Internal

CITATION:	Borovina v Commissioner for Fair Trading (GD) [2007] NSWADTAP 44 This decision has been amended. Please see the end of the decision for a list of the amendments.
PARTIES:	APPELLANT Slavisa Borovina RESPONDENT Commissioner for Fair Trading
FILE NUMBER:	079023
HEARING DATES:	6 August 2007
SUBMISSIONS CLOSED:	6 August 2007
DATE OF DECISION:	27 August 2007
BEFORE:	O'Connor K - DCJ (President); Montgomery S - Judicial Member; Antonios Z - Non Judicial Member
CATCHWORDS:	Home Building - Contractor Licence - Refusal - Fit and Proper Person - Relevant Considerations - Conditional Licence - Appropriateness - Home Building Act 1987
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	063312
DATE OF DECISION UNDER APPEAL:	04/05/2007
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Commercial and Private Agents Act 1986 (SA) Home Building Act 1989
CASES CITED:	Borovina v Commissioner for Fair Trading [2007] NSWADT 80 Re Minister for Immigration and Multicultural Affairs S20/2002 (2003) 198 ALR 159 SZAPC v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 995 Briginshaw v Briginshaw (1938) 60 CLR 336 House v The King (1936) 55 CLR 499 De More v Garpace [2001] NSWCA 350 Petracaro v Commissioner of Consumer Affairs (1994) 62 SASR 387 Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 Hinton & Ors v Commissioner for Fair Trading, Office of Fair Trading (GD) [2007] NSWADTAP 17 Sunol v Collier [2006] NSWADTAP 51 CDJ v VAJ (1998) 197 CLR 172
REPRESENTATION:	APPELLANT T J Davie of counsel instructed by N Borak, Borak & Co RESPONDENT V Griswold instructed by W Maynard
ORDERS:	Appeal dismissed

REASONS FOR DECISION

1 The Commissioner for Fair Trading (as successor to the Director-General of Fair Trading) is the administrator of the licensing scheme under the Home Building Act 1989 (HB Act). In February 2006 the Commissioner refused the appellant’s application for a licence to undertake residential work as a contractor in respect of carpentry, subsequently confirmed on internal review. This appeal is from the Tribunal’s decision dismissing his application for review: see Borovina v Commissioner for Fair Trading [2007] NSWADT 80.

2 The Commissioner’s rejection of the application originally had two bases: one, the appellant’s inability to demonstrate sufficient industry experience to meet the competence criteria; and two, the Commissioner’s opinion that he was not a fit and proper person by reason of adverse findings made against him by the Independent Commission Against Corruption (ICAC) resulting from an inquiry into a fraudulent scheme for obtaining contractor licences. By the time the matter came to the Tribunal, the appellant had satisfied the Commissioner that he met the experience requirement, and the Commissioner no longer relied on that ground.

3 The case proceeded on the fitness ground only. Section 20 of the HB Act provides relevantly:

‘(1) The Director-General must reject an application for a contractor licence if:

(a) the Director-General is not satisfied that the applicant is a fit and proper person to hold a contractor licence.’

4 The appellant came to Australia from Bosnia 20 years ago at the age of 22. He has spent his entire work career since in the building industry. He has mainly worked as a sub-contractor on residential projects. Because of his lack of success in obtaining a contractor licence, he is presently limited to working as an employee carpenter.

5 Prior to 2001 he had often worked as a sub-contractor carpenter without a licence. In 2001 he took steps to apply for a contractor licence – in the broadest category, builder. Ultimately he did not complete the process. In 2003 he applied again, going through the whole process. It is the application that came under notice of ICAC. In 2005 he applied for a contractor licence limited to work as a carpenter. It is this application which is the subject of the present proceedings.

6 Like the Commissioner, the Tribunal referred to the following matters in reaching the conclusion that he did not meet the ‘fit and proper’ person requirement:

- The ICAC finding that the appellant had engaged in corrupt conduct by making false statements in the application form lodged in 2003 in relation to his prior experience.

- His admission that he paid a principal in the fraudulent licensing scheme (Mr Aboulhosn, a corrupt interpreter who had knowledge of the usual questions asked by the Office of Fair Trading examiners) $20,000 to help him obtain a licence. The Tribunal saw a payment of this scale as, at the least, not consistent with an innocent intent.

- The fact that the Director of Public Prosecutions (DPP) is considering whether to lay a charge of corrupt conduct as recommended by ICAC.

- The fact that the appellant worked for many years as a sub-contractor without obtaining a licence.

The Appeal

7 Mr Davie of counsel appeared for the appellant. The Tribunal’s account of the legal principles relating to the assessment of requirements of ‘fitness’ and ‘character’ in the statutory licensing scheme is not disputed. The case-law is well known. We will not recount that learning here.

8 At hearing before the Tribunal and on appeal, the appellant has submitted that when the matters of concern are placed in a broader context they are not so serious as to justify refusal of a licence.

9 Mr Davie’s submission is that the Tribunal misapplied the applicable law to such a degree that the decision was irrational or illogical. Accordingly the Appeal Panel should extend the appeal to the merits and grant the licence; or, at least, remit it for reconsideration.

10 This ground of attack (irrationality, illogicality) has emerged in recent High Court decisions such as Re Minister for Immigration and Multicultural Affairs S20/2002 (2003) 198 ALR 159; see also, SZAPC vMinister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 995. See further Aronson and Dyer, Judicial Review of Administrative Action (3rd ed. 2004) 247-251.

11 Supplying False Statements: It is said that the false statement related to a small aspect of his work history as a young man in Bosnia. Moreover, it is now accepted that he has a work history which meets the experience criteria.

12 Tribunal Finding of Deliberate Falsity: Mr Davie criticised the conclusion of fact in the last sentence of para [62], i.e.

‘Further, Mr Borovina [sic] answers to questions at the ICAC concerning his phone calls with Mr Aboulhosn, notably those concerned with whether the history provided in his 2001 and 2003 applications for contractor licence matched up, leave me comfortably satisfied, to the requisite standard, that Mr Borovina was aware that false information was being submitted to the Office of Fair Trading: Briginshaw v Briginshaw (1938) 60 CLR 336.’
13 Mr Davie criticised the Tribunal for having made that finding when a sworn statement had been provided by his client in which he denied that he had deliberately given false information and he had not been cross-examined on it.

14 The Tribunal was engaged in the review of an administrative decision. The administrative decision in this instance relates to a licensing system designed to protect the public from incompetence and dishonesty.

15 The Administrative Decisions Tribunal Act 1997 (ADT Act), s 63(1) provides:

‘(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:

(a) any relevant factual material,

(b) any applicable written or unwritten law.’

16 The Tribunal did carry out a comprehensive examination of the material before it, including the sworn statement. The cross-examination of Mr Borovina at the ICAC inquiry was relied upon.

17 While the Tribunal was entitled to view sceptically the assertions of Mr Borovina, in order to address the matter before it, it did not need to go as far as to make a positive finding of fraud on the Briginshaw standard. To that extent we agree with Mr Davie’s objection. It was, we think, an error for the Tribunal to make a finding of this gravity in circumstances where Mr Borovina, not having been called to give evidence before the Tribunal, had no opportunity to address the possible finding.

18 Fitness and Degree of Satisfaction: The Briginshaw standard was raised in another way by Mr Davie’s submissions. He submitted that a person may only be refused a licence which enables him or her to practice an occupation or profession if it can be shown that they lack a requisite characteristic after applying the Briginshaw standard. We do not agree.

19 In our view the clear purpose of the licensing provisions is to provide a guarantee to consumers that a contractor for home building work is a person of good character.

20 We accept of course that in high volume licensing schemes administered with limited resources the administrator may adopt the practice of relying on the information given in a written application going to such matters as adverse criminal or disciplinary history. Subject to the competence requirements being satisfied, the administrator may proceed on the basis the person is assumed to be of good character in the absence of any significant or relevant criminal or disciplinary history.

21 But if the administrator has evidence casting doubt on a person’s good character, the administrator at that point may form a view as to the person’s character and fitness for the occupation, provided it is a reasonable exercise of discretion in the sense explained in leading authorities such as House v The King (1936) 55 CLR 499, 505-6.

22 There were questions around Mr Borovina’s conduct in 2001 and 2003 of sufficient significance to raise a doubt about his honesty and integrity, at least until more is revealed.

23 Failure to Obtain Licence: Mr Davie questioned the weight given by the Tribunal below to the fact that Mr Borovina had failed to obtain a licence though he had regularly worked as a sub-contractor.

24 Mr Davie noted that while it was always clear that principal contractors were required to hold licences to undertake home building work, it had for many years, he said, been unclear as to whether sub-contractors to licensed contractors also needed to hold licences. He said there was a division of views on this issue as recently as 2001. At first instance, Dunford J considered that the legislation did not require a sub-contractor to hold a licence, reversed by the Court of Appeal: De More v Garpace [2001] NSWCA 350 (Stein JA, Rolfe, Fitzgerald A-JJA).

25 Accepting for the moment that Mr Borovina could be excused for not having a licence in the period prior to 2001, it is difficult to ignore the fact that he continued on without a licence for the next four years. It is said by Mr Davie that account should be taken of his limited English language skills. Similarly to the submission made in respect of the finding of deliberate falsity, Mr Davie submitted that no adverse conclusion should have been drawn as to his client’s failure to obtain a licence, given that his client had given evidence to the contrary and it had not been tested by cross-examination.

26 Mr Davie referred to para [29] of Mr Borovina’s sworn statement:

‘Prior to the inspector coming on site [July 2005] I was not aware I needed a Contractors licence if working with licensed builders as our work is inspected by the Council or Private Certifiers. In my 2003 application for a Builders Licence I stated that I did not hold a Contractors licence but I have been working as a contractor no one mentioned anything [sic].’
27 In connection with his licence applications in 2001 he said:
‘In approximately 2001 I made an application for a builder’s licence or a Carpenters licence. I cannot recall I think it was a builder’s licence when I consider Mr George Staikos’s reference dated 2001. I did not proceed with the application as the Department wanted so much information that I had not time to chase around.’
28 In our view, it is incumbent on persons operating in an industry known to be affected by a detailed licensing scheme to inform themselves as to the requirements as they may affect them. If they can point to credible and authoritative independent advice which led them not to seek a licence (such as from a departmental officer or some other person of standing such as a solicitor or building consultant with relevant expertise) that may provide an excuse which might be seen as not bearing on their fitness.

29 But if they chose to operate in a regulated industry indifferently to the licensing implications for them, they run, we think, the risk of that indifference being counted adversely to them in a consideration of their fitness and character. In this instance there was material suggesting that Mr Borovina was indifferent to his licensing obligations. He began the process of getting a licence in 2001 and then abandoned it. He commenced the process (connected to the fraudulent scheme) again in 2003.

30 The Tribunal was, in our view, entitled to weigh this factor in the balance in the way that it did, and treat it as a relevant consideration.

31 The Making of the $20,000 Payment: More significantly, in our view, the material before the Commissioner or the Tribunal included no satisfactory explanation from Mr Borovina as to why he had given a person the large sum of $20,000 to assist him to obtain a licence under the Act. The ICAC report found that this person, an interpreter, was a principal in a licensing racket. The interpreter, Mr Aboulhosn, ICAC found, coached people as to the questions that, in his experience as an interpreter, were asked at oral examinations undertaken by departmental inspectors. A corrupt Departmental inspector was another principal in the racket.

32 The Tribunal said:

‘62 In my view the findings made by ICAC against Mr Borovina reflect badly on his character, integrity and honesty. The fact that he paid $20,000 to Mr Aboulhosn, a man who introduced himself at a building site, to assist him in obtaining a building licence also reflects badly on his character, honesty and integrity. Ms Griswold, who appeared for the Commissioner, submitted that Mr Borovina’s conduct in making that payment speaks for itself. Mr Davie, for Mr Borovina, took issue with this. He pointed out that a similar payment, to a commercial law firm, for a licence application would not arouse suspicion. I do not accept this submission form Mr Davie. The circumstances in which the arrangement was reached, the very high price paid, and Mr Aboulhosn apparent lack of qualifications for the task, all point to Mr Borovina not acting with honesty or integrity when engaging Mr Aboulhosn. Further, Mr Borovina answers to questions at the ICAC concerning his phone calls with Mr Aboulhosn, notably those concerned with whether the history provided in his 2001 and 2003 applications for contractor licence matched up, leave me comfortably satisfied, to the requisite standard, that Mr Borovina was aware that false information was being submitted to the Office of Fair Trading: Briginshaw v Briginshaw (1938) 60 CLR 336.

63 The fact that Mr Borovina engaged in this conduct while applying for a contractor licence under the Act raises further concerns. It shows that Mr Borovina has not acted with the required honesty and integrity in a matter related to the industry in which he now seeks a licence. Neither the difficulties he encountered in satisfying the Commissioner’s requirements when he applied for a licence in 2001, nor his problems with finding the time to do so, justify or adequately explain Mr Borovina’s continuing to work without a licence.’

33 We agree with the Tribunal that it is difficult to accept that Mr Borovina did not have some suspicion that the payment of such a large amount, $20,000, involved in the circumstances an acceptance that the recipient of the payment was engaged in some kind of corrupt manipulation of the licensing system.

34 It was entitled to treat that matter as a relevant consideration.

Conditional Licence

35 Mr Davie submitted that any concern over whether Mr Borovina might be regarded as fit to deal with the general public could be met by a condition on the licence that restricted Mr Borovina so that he only take work as a sub-contractor. The Commissioner has a power to impose conditions on the grant of a licence (see s 21(2); s 33).

36 Mr Davie referred to the South Australian home building licensing case, Petracaro v Commissioner of Consumer Affairs (1994) 62 SASR 387. That case dealt with a licence application for a stonemason/bricklayer contractor licence from a previously-licensed person with a poor criminal record (including break and enter offences and receiving stolen goods). He had served periods of imprisonment. Olsson J noted that the offences were not connected with work done by him on worksites where he had previously been engaged as a licensed bricklayer, stonemason and building work supervisor. In allowing his appeal, Olsson J noted that the usual mode of working in the industry was by sub-contracting and it was difficult to get work as an employee. The Court accepted evidence as to positive steps the applicant had made to rehabilitate himself and break with his criminal past, and that none of the offences had been work-related. His Honour said at 390:

‘It cannot be stressed too strongly that the Act is not pre-occupied with general character aspects, except to the extent that these may directly be relevant to the clear purposes of the statute, which essentially focus on the fitness of a person to discharge the responsibilities applicable to a particular type of licence. The statute is primarily concerned with the protection of the public by ensuring that building work is not carried out by persons who are not suitably skilled or who are, or are likely to be, dishonest with those with whom they enter into contracts. It goes without saying that the case of a subcontract bricklayer who usually gives a firm price to a builder for quite specific work is to be assessed mainly on his reliability and skill to do the job, whereas in the case of a category 1 building contractor the public concern must relate not only to technical ability but also general trustworthiness and honesty in negotiating and discharging contractual obligations.

Moreover, the test to be applied to the required characteristics of a bricklayer are fundamentally different from those related to (say) a security guard under the Commercial and Private Agents Act 1986 – where general good character is a vital feature of inherent qualifications for much of the work involved, for quite obvious reasons.’

37 The New South Wales legislation does not make an express distinction, in contrast to the South Australian scheme as described by Olsson J, between sub-contractors to licensed builders and contractors who deal directly with the general public. It may be that such a distinction could usefully be made.

38 In De More, Fitzgerald A-JA, who gave the principal judgment, pointed to various provisions in the HB Act which drew within its purview pure sub-contractors: see 136-137. He rejected the view that the policy of the HB Act was only concerned with the protection of consumers in relation to persons who contract with them to do work. He observed at 136:

‘In any event, a requirement that sub-contractors must be licensed to contract to do residential building work is certainly not contrary to the interests of property-owners.’
39 In our view it would not be appropriate to grant Mr Borovina a contractor licence subject to a ‘sub-contractor’ condition of the kind proposed. The New South Wales Parliament, in contradistinction to the South Australian approach, has not chosen to create a ‘sub-contractor’ category of contractor licence. The Tribunal is being asked to allow a person who could not meet the character test for the usual licence to receive a reduced form of the licence because their character is sufficient to meet the lower bar set by the reduced form of the licence. We would, we think, be subverting the legislative intent were we to adopt such an approach. We do not think we have the freedom of action in this regard that was allowed to Olsson J by the more fine-grained South Australian licensing scheme. Care must be taken to ensure that conditions attached to a licence or registration are consistent with the overall objectives of the relevant scheme: see generally, Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630.

40 In any event, taking up the point made by Fitzgerald A-JA in the passage quoted above, sub-contractors on site may well be required to deal directly with the consumer client of the principal contractor. It would, we think, not meet with a client’s approval to learn that they have on site a person who was not seen by the regulatory authority as fit, on character grounds, to hold the contractor licence for the relevant work category.

Conclusions

41 The Tribunal did not need to go so far as to make a finding of deliberate falsity in relation to Mr Borovina’s state of mind in respect of his supply of false information in the 2003 application. Though this was, in our view, an error, the material, without that element, strongly supported the conclusion reached by the Tribunal.

42 As the Appeal Panel noted in Hinton & Ors v Commissioner for Fair Trading, Office of Fair Trading (GD) [2007] NSWADTAP 17 at [85]:

‘85. While the Appeal Panel’s discretion to grant leave is not qualified by the ADT Act (see, for example, Sunol v Collier [2006] NSWADTAP 51 at [29]), it should be exercised with caution and in the interests of justice. It is not enough that the appellant disagrees with the decision. The Appeal Panel is not designed to be a second trial level of the Tribunal. As McHugh J said in CDJ v VAJ (1998) 197 CLR 172 at [111] the power to permit an appeal on a question of fact is ‘not intended to have the practical effect of obliterating the distinction between original and appellate jurisdiction’. Appeal Panels must recognise the importance of not interfering with soundly made decisions. An appellant should normally, we think, demonstrate on persuasive grounds that a substantial injustice would result if the decision was allowed to stand.’
43 Similar considerations apply where an error of law is identified. We are not satisfied that the error identified in this case led to any substantial injustice. We are not disposed to grant leave to extend the appeal to the merits under s 113 of the ADT Act.

44 We acknowledge that the DPP has now had the recommendations of the ICAC inquiry for over two years. If the DPP does not proceed to charge Mr Borovina in the near future, or Mr Borovina is acquitted, then it may well be appropriate to give less weight to the ICAC recommendation. Moreover, the Commissioner would, in the event of any future application, be quite entitled to continue to seek an explanation from Mr Borovina for dealing with the interpreter and handing him such a large sum of money. Those who seek a licence must, we think, be candid with the administrator in relation to matters of relevance to the exercise of the administrator’s discretion. We accept that for the time being, with charges remaining a possibility, Mr Borovina may be disinclined to respond to inquiries of that kind.

Order

Appeal dismissed.

05/09/2007 - To correct error by inserting 'not' after 'did' in the second line, sentence starting 'Ultimately'. - Paragraph(s) 5