Bouchahine v Commissioner for Fair Trading

[2009] NSWADT 126

CITATION:	Bouchahine v Commissioner for Fair Trading [2009] NSWADT 126
DIVISION:	General Division
PARTIES:	APPLICANT John Bouchahine RESPONDENT Commissioner for Fair Trading
FILE NUMBER:	073264
HEARING DATES:	24 November 2008
SUBMISSIONS CLOSED:	24 November 2008
DATE OF DECISION:	28 May 2009
BEFORE:	Montgomery S - Judicial Member
CATCHWORDS:	Home builder - cancellation of contractor licence
LEGISLATION CITED:	Home Building Act 1989 Home Building Regulation 2004 Administrative Decisions Tribunal Act 1997
CASES CITED:	Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Barakat v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 127 Commissioner for ACT Revenue v Alpha One Pty Ltd (1994) 49 FCR 589 Director-General, Department of Transport v Z (No.2) (GD) [2002] NSWADTAP 37 Hughes and Vale Pty Ltd v New South Wales (No.2) (1955) 93 CLR 127 Khatter v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 161 Raso v Commissioner for Fair Trading, Office of Fair Trading [2008] NSWADT 51 Re Brennan & Australian Casino Surveillance Authority (1995) 38 ALD 794 Re Percival and Australian Securities Commission (1993) 30 ALD 280 Tomoski Developments Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 263 Re T and the Director of Use and Community Services [1980] 1 NSWLR 392 Sobey v Commercial and Private Agents Board 20 SASR 70 McBride v Walton (NSW) Court of Appeal, unreported, 15 July 1994 YJ v Chief Executive Officer, WorkCover Authority [2006] NSW ADT 264
REPRESENTATION:	APPLICANT B Walker SC RESPONDENT C Webster, barrister
ORDERS:	1. The decision of the Commissioner for Fair Trading to refuse Mr. Bouchahine’s application for a Contractor Licence under the Home Building Act 1989 is set aside 2. In substitution for that decision, the decision is made that the application is granted.

1 Mr. Bouchahine (“the Applicant”) commenced working in the building industry in 1987 and has worked in that industry ever since. In December 2006 he applied to the Commissioner for Fair Trading (“the Commissioner”) for a Contractor Licence under the Home Building Act 1989 (“the HBA”) in the category of ‘General Building Work’. A delegate of the Commissioner refused to grant the licence on the basis that the Applicant had not provided acceptable evidence verifying sufficient relevant industry experience; and that the Applicant is not a fit and proper person to be the holder of a licence.

2 The Commissioner has now accepted that the Applicant has sufficient relevant industry experience but she does not accept that the Applicant is a fit and proper person to be the holder of a licence.

The Issue for the Tribunal

3 In reviewing this decision, the task of the Tribunal is to determine what is the correct and preferable decision in relation to the Applicant’s application, having regard to the material before it, including any relevant factual material and any applicable written or unwritten law: section 63 of the Administrative Decisions Tribunal Act 1997 (“the ADT Act”).

4 Central to this issue is the question of whether the Applicant is a fit and proper person to be the holder of a licence.

Background

5 The question of the Applicant’s fitness arises because of the circumstances in which he had applied for a contractor's licence in June 2002.

6 In June 2002 an application for a contractor licence (“the 2002 application”) was lodged with the Office of Fair Trading (“the OFT”) on behalf of the Applicant. The Applicant’s evidence is that he relied on the assistance of a person named ‘Joe’ to lodge the application and that he paid Joe a fee of $9,000 in relation to the application.

7 Various false documents were supplied in support of the 2002 application. The documents supplied included a forged TAFE Associate Diploma in Applied Science (Building) testamur. That testamur, together with a number of others, were the subject of evidence before the Independent Commission Against Corruption (“ICAC”) inquiry into activity associated with applying for and obtaining building contractor licences.

8 A contractor licence was issued to the Applicant in July 2002. In January 2003, a contractor licence was issued to Oz Owned Constructions Pty Ltd with the Applicant as sole director and nominated qualified supervisor.

9 As a result of evidence given at the ICAC inquiry, it was brought to attention of the OFT that the Applicant did not have the qualifications for the Associate Diploma in Applied Science (Building). TAFE records confirmed that the Applicant did not have those qualifications.

10 In May 2005 the OFT, after referring to the ICAC evidence gave the Applicant the opportunity to be heard as to why his licence should not be cancelled. The Applicant's contractors licence was subsequently cancelled. In August 2005 Oz Owned Constructions Pty Ltd, of which the Applicant was the nominated supervisor, also surrendered its licence.

11 Also in August 2005 the Applicant lodged an application for a contractor licence for HCM Group Pty Ltd (“the HCM Group”). That licence was granted in September 2005. The Applicant was appointed as director of the HCM Group in October 2005 but resigned shortly afterwards. He was reappointed to that position in March 2006.

12 In December 2006 the Applicant applied for a personal contractor licence. The OFT rejected that application in March 2007 and also advised the HCM Group that it considered that the Applicant was not a fit and proper person to hold a contractor licence or to be a director of a company licensed under the Act. The HCM Group subsequently retained its licence following the appointment of another director.

13 The decision to refuse the Applicant’s application for a contractor licence was affirmed on internal review. The Applicant has applied to this Tribunal for review of that determination.

The Relevant law

14 Section 20 of the HBA provides:

20 Issue of contractor licences

(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, or

…

(1A) Without limiting subsection (1) (a), in determining whether an applicant is a fit and proper person to hold a licence the Director-General is to consider whether the applicant is of good repute, having regard to character, honesty and integrity.

(2) The regulations may fix or provide for the Director-General to determine additional standards or other requirements that must be met before any contractor licence is issued or before a contractor licence of a particular kind is issued.

15 The term "fit and proper" is not defined in the HBA. The Home Building Regulation 2004 imposes general requirements for obtaining a licence under the HBA. None of those appear to be relevant in respect of this application.

16 Several decisions of the Tribunal have concerned applicants who had obtained licences on the basis of a falsified documentation. In those matters the Tribunal has considered the relevant legal principles in regard to the assessment of a person’s fitness and propriety to be issued with a licence to undertake a regulated activity: see Raso v Commissioner for Fair Trading, Office of Fair Trading [2008] NSWADT 51; Barakat v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 127; Khatter v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 161. Judicial Member Higgins summarised these principles in Khatter:

10 It is well accepted that ‘the question whether a person is fit and proper is one of value judgment’ – see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason DJ at 380. The discretion vested in a decision maker in determining a person’s fitness and propriety is to ‘give wide scope for judgment and allow broad basis for rejection’: see Commissioner for ACT Revenue v Alpha One Pty Ltd (1994) 49 FCR 589 per Northrop, Miles and French JJ at 389.

11 The expression ‘fit and proper person’ has no precise meaning and takes its meaning from its context, namely from the activities in which the person is or will be engaged and the ends to be served by those activities: see Bond per Toohey and Gaudron JJ at 380. That is, fitness and propriety are flexible concepts depending on the legislative context and the nature of the regulated activities: see also Re Percival and Australian Securities Commission (1993) 30 ALD 280, at 290 and Re Brennan & Australian Casino Surveillance Authority (1995) 38 ALD 794 at [41].

12 Fitness ‘with respect to an office is said to involve three things, honesty knowledge and ability … ‘: see Hughes and Vale Pty Ltd v New South Wales (No.2) (1955) 93 CLR 127 at 156-7.

13 To be satisfied that a person is ‘fit and proper’ it must be shown that the applicant ‘is possessed of a requisite knowledge of the duties and responsibilities involving 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’: see Sobey v Commercial and Private Agents Board 20 SASR 70 per Walters J at [76].

14 Where there is evidence of misconduct, that conduct should be considered in the context of any explanation that is given for the misconduct, its seriousness to the particular activity for which the person seeks to be licensed, the motivation of the person engaging in the misconduct, whether the misconduct is an isolated incident, the person’s underlying qualities of character, and the person’s conduct since the incident of misconduct and whether this demonstrates recognition of misconduct and subsequent reform: see McBride v Walton (NSW Court of Appeal, unreported, 15 July 1994 per Kirby P at [21]-[26], Powell JA at [59]-[73]. See also YJ v Chief Executive Officer, WorkCover Authority [2006] NSWADT 264 at [34]-[47].

15 It is accepted that issues of character and reputation may be determinative in deciding whether a person is fit and proper. These are different concepts with character relating to the inherent moral qualities of a person (see Melbourne v The Queen [1999] 198 CLR 1 per McHugh J at [15]. The assessment of a person’s character is relevant as it is an indicator of the person’s likely future conduct in the role that person will perform if a licence is granted: see Bond per Toohey and Gaudron JJ. On the other hand, reputation is an indication of the public perception of the future conduct of the person in the role for which a licence has been sought: see Re T and the Director of Youth and Community Services [1980] 1 NSWLR 392 per Waddell J at 393 and Director-General, Department of Transport v Z (No. 2) (GD) [2002] NSWADT AP 37 at [38].

17 In Frugtniet and Anor v Commissioner for Fair Trading; Commissioner for Fair Trading v Travel Action Pty Ltd and Anor (GD) [2004] NSWADTAP 12 (16 April 2004) at [209] the Appeal Panel summarised the principles involved in assessing fitness and propriety, derived from the Commercial Tribunal’s decision in Young Taek Chong v Tomazin (1994) ASC 56-283 at 58:

‘the question must be determined with reference to the particular purposes of the regulatory regime involved; that account must be taken of the minimum standards of the profession or occupation being regulated; that matters such as ‘character’, ‘suitability’, ‘integrity’ and ‘trustworthiness’ – indeed, ‘any aspect of fitness or propriety that is relevant to the public interest’ – must be considered; that while an isolated act may suffice to show lack of fitness and propriety, this will not necessarily be the case, and ‘deliberate prolonged conduct or a course of conduct’ stands on a different footing; and finally that ‘the evaluation of fitness involves a wide discretion’

18 The circumstances concerning the 2002 application are not in dispute. The Commissioner submits that the Applicant's conduct in surrendering responsibility for the whole of the content of the application for his builder's licence to Joe does not reflect well on him. The Applicant admitted that by 2002 he had decided to obtain his own building licence to avoid the need to contract with licensed builders and agreed that he made enquiries of both the Department of Fair Trading and people in the industry about how he should go about obtaining the licence. He was therefore aware of the significance of a licence. The Commissioner submits that an experienced businessman would be expected to understand the fundamental importance of the accuracy of the details in an application for a builder's licence.

19 In 2002 the relevant application fee was $376. The Applicant paid Joe a fee of $9,000 in cash. The Commissioner submits that the fee that the Applicant paid to Joe was significantly in excess of the application fee. He made no inquiries about what the OFT required and his only explanation for his failure to ensure the accuracy of the application was that he was working at the time.

20 He was aware that he had not signed the application but he nevertheless acted on the licence once it was issued. He also relied on the licence in regard to Oz Owned Constructions' application for a company contractor licence.

21 The Commissioner argues that these acts distinguish this matter from Raso, where Mr Raso had not undertaken any general building work during the time he held the fraudulently obtained licence. The Commissioner also argues that the other Tribunal decisions in which a licence was granted to an applicant who had previously been granted a licence on the basis of fraudulent documents can be distinguished on their facts.

22 The Commissioner submits that the Tribunal must be satisfied that notwithstanding his abrogation of responsibility in relation to the 2002 application, the Applicant has rehabilitated to the extent that he can be held out to the public as a person to be entrusted with the sort of work that the licence entails.

23 The Commissioner submits that the Tribunal should affirm the decision to refuse the Applicant's application.

24 The Applicant provided several statements and has obtained numerous references. He also gave oral evidence at the hearing. He accepts that his conduct in relation to the 2002 application was "foolish and inappropriate". He has acknowledged his mistake, not only in his evidence but also to the various referees. He submits that the references that he has obtained show that he and the referees are aware of the inappropriate nature of his conduct, and despite this awareness the referees were still prepared to support this application. The referees were available for cross-examination had that been requested.

25 The Applicant’s evidence is that in June 2002 he relied upon the assistance of a person named ‘Joe’ to lodge an application with the OFT for a contractor licence. He admitted that he paid Joe a fee of $9,000. His evidence is that he had made inquiries about obtaining a licence on the basis of his experience. He understood that it was possible to obtain a licence if he had 20 years relevant experience.

26 Joe approached him while he was attending a course at Castle Hill. They started talking about licences and the Applicant told Joe about his experience in the industry. Joe explained that he could assist the Applicant in putting together an application for a contractor licence. The Applicant’s evidence is that he knew that there would be considerable work involved in gathering the references needed as evidence of his experience and he was busy at the time. He was prepared to pay Joe to gather the evidence, to do the paperwork and to lodge the application for a contractor licence.

27 Mr Walker submitted that other decisions of the Tribunal that have dealt with applicants who had obtained licences on the basis of a falsified documentation can be distinguished on their facts. He says that the Applicant’s only substantive failing relates to the circumstances of the 2002 application, and that the Applicant acknowledges that failing. He says that there is no reason to expect any recurrence. The Applicant surrendered his licence upon request and did not attempt at that time to justify his conduct. Since that time he has completed additional training in order to qualify for the licence.

28 Mr Walker says that unlike Mr Raso, the Applicant has never been convicted of any offence relating to his conduct. Nor was he referred to in any way by ICAC. In Barakat the Applicant admitted that he had obtained the testamur fraudulently. The conduct was held to be more serious than in Raso but nonetheless the licence was granted.

29 It is submitted that the Applicant has provided sufficient evidence to demonstrate he is a fit and proper person to hold a licence. It is submitted that 20 years of work with only one complaint as to a development by him shows that there is no real issue as to the Applicant's ability, nor is there an issue as to risk to the public. The fact that he has completed further education can only assist in providing confidence that his management skills have been enhanced.

Consideration

30 The HBA is essentially a consumer protection Act that regulates residential building work in NSW. It provides for the licensing and regulation of those engaging in residential building work, and makes provision as to their competence, fitness and solvency, and for their discipline: Tomoski Developments Pty Ltd v Commissioner for Fair Trading [2005] NSWADT 263 at paragraph [14]. The Commissioner has now accepted that the Applicant has sufficient relevant industry experience. The only issue remaining in this matter is whether the Applicant is a fit and proper person to be the holder of a licence. This question arises because of the circumstances of the 2002 application.

31 Whether the Applicant is a fit and proper person must be determined in the light of the nature and purpose of the activities he would undertake as the holder of a licence. Fitness and propriety concerns honesty, knowledge and ability. Character concerns a person’s inherent moral qualities – their standards, attitudes and the quality of the person in these terms. A person’s character may be capable of rehabilitation.

32 The context of the activities the person would undertake requires that account should be taken of the nature of the relevant industry and public policy objectives behind the regulation of the relevant activities. Ultimately, issues of fitness and propriety and good character are matters of judgement for the decision-maker.

33 It is not disputed that no adverse findings were made by the ICAC against the Applicant in regard to the 2002 application. On the material before the Tribunal, no finding can be made that the Applicant had fabricated any documents or lodged the 2002 application.

34 In applying the principles set out in McBride, it is my view that the Applicant’s abrogation of responsibility in relation to the 2002 application was extremely serious. It was more than "foolish and inappropriate" as he contends. There can be no doubt that he was aware of the significance of a licence and yet he acted in an extremely irresponsible manner in not checking the accuracy of the application.

35 It is conceivable that the Applicant would have found the prospect of gathering evidence of 20 years experience in the industry daunting and there is no doubt that it would have been a time consuming exercise. I therefore accept his explanation that he was prepared to pay Joe to prepare the application because he was working at the time. However, this does not explain his failure to pursue Joe in relation to the lodgement of the application or to check the accuracy of what was submitted.

36 Nevertheless, I am satisfied that the conduct is isolated and that it occurred almost 7 years ago. The Applicant’s record since that time is unblemished. In my view, he has “learned his lesson” and there is no reason to expect any recurrence. He has had over 20 years of working in the industry and during that time the Commissioner has had only one complaint about his work. This supports the submission that there is no real issue as to his ability or as to risk to the public. In my view, the fact that he has completed further education also shows that he recognises the need to satisfy the OFT requirements in relation to the licence. He has provided numerous references from persons who are aware of the issues concerning the 2002 application and who nevertheless support this application.

37 . I am satisfied from the evidence that the Applicant is a fit and proper person to hold the licence that he is seeking. It follows that the decision to refuse to grant the licence should be set aside and the order made that the licence be granted.

Orders

1. The decision of the Commissioner for Fair Trading to refuse Mr. Bouchahine’s application for a Contractor Licence under the Home Building Act 1989 is set aside

2. In substitution for that decision, the decision is made that the application is granted.