Builders' Registration Board and Ongarezos
[2006] WASAT 53
•8 MARCH 2006
BUILDERS' REGISTRATION BOARD and ONGAREZOS [2006] WASAT 53
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2006] WASAT 53 | |
| BUILDERS' REGISTRATION ACT 1939 (WA) | |||
| Case No: | VR:323/2005 | 22 FEBRUARY 2005 | |
| Coram: | JUDGE J CHANEY (DEPUTY PRESIDENT) DR B DE VILLIERS (MEMBER) MR J BRAY (SESSIONAL MEMBER) | 8/03/06 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Respondent found to have engaged in misleading conduct fine imposed | ||
| B | |||
| PDF Version |
| Parties: | BUILDERS' REGISTRATION BOARD GEORGE ONGAREZOS |
Catchwords: | Builders Disciplinary proceedings Fraudulent or misleading or deceptive conduct Misrepresentation as to registration of company Misrepresentation as to identity of builder Representations unintentional Whether intention an element of misleading conduct for purpose of Builders' Registration Act 1939 (WA) Words and phrases "Fraudulent conduct" "Misleading or deceptive" |
Legislation: | Builders' Registration Act 1939 (WA), s 12D, s 13, s 13(d), s 13(1), s 13(1)(d), s 13(1)(da), s 13A, s 10A, s 10B, s 10C Builders' Registration Regulations (WA), r 21 Building Legislation Amendment Act 2000 (WA) Fair Trading Act 1987 (WA), s 10, s 69 Trade Practices Act 1974 (Cth), s 52, s 79(1) |
Case References: | Briginshaw v Briginshaw (1938) 60 CLR 336 Cambridge Building Co Pty Ltd v Builders' Registration Board of Western Australian (2000) 25 SR (WA) 21 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191-197 Nil |
Orders | 1. The respondent is fined $3000.,2. The respondent is to pay a portion of the applicant's costs fixed at $1000. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : VOCATIONAL REGULATION ACT : BUILDERS' REGISTRATION ACT 1939 (WA) CITATION : BUILDERS' REGISTRATION BOARD and ONGAREZOS [2006] WASAT 53 MEMBER : JUDGE J CHANEY (DEPUTY PRESIDENT)
- DR B DE VILLIERS (MEMBER)
MR J BRAY (SESSIONAL MEMBER)
- Applicant
AND
GEORGE ONGAREZOS
Respondent
Catchwords:
Builders Disciplinary proceedings Fraudulent or misleading or deceptive conduct Misrepresentation as to registration of company Misrepresentation as to identity of builder Representations unintentional Whether intention an element of misleading conduct for purpose of Builders' Registration Act 1939 (WA)
Words and phrases "Fraudulent conduct" "Misleading or deceptive"
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Legislation:
Builders' Registration Act 1939 (WA), s 12D, s 13, s 13(d), s 13(1), s 13(1)(d), s 13(1)(da), s 13A, s 10A, s 10B, s 10C
Builders' Registration Regulations (WA), r 21
Building Legislation Amendment Act 2000 (WA)
Fair Trading Act 1987 (WA), s 10, s 69
Trade Practices Act 1974 (Cth), s 52, s 79(1)
Result:
Respondent found to have engaged in misleading conduct fine imposed
Category: B
Representation:
Counsel:
Applicant : Mr AS Stavrianou
Respondent : Mr SG Scott
Solicitors:
Applicant : Mr N Oud - Builders' Registration Board of Western Australia
Respondent : Stables Scott
Case(s) referred to in decision(s):
Briginshaw v Briginshaw (1938) 60 CLR 336
Cambridge Building Co Pty Ltd v Builders' Registration Board of Western Australian (2000) 25 SR (WA) 21
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191-197
(Page 3)
Case(s) also cited:
Nil
(Page 4)
Summary of Tribunal's decision
1 The Builders' Registration Board alleged that Mr Ongarezos, a registered builder, had been fraudulent by misrepresenting to a developer that a company, Concrete Precast Industries Pty Ltd, was a registered builder. Mr Ongarezos was a director of the company at the time. It was also alleged that Mr Ongarezos represented to the City of Swan that he was the builder on the project when the truth was that Concrete Precast Industries Pty Ltd had contracted to do the work.
2 Mr Ongarezos admitted that the documents he signed may have given a mistaken impression, but said that he did not intend to be misleading, and he genuinely believed that, as he in fact intended to act as the supervisor of the work, and was himself registered as a builder, there was nothing untoward in his actions.
3 The Tribunal considered whether an intention to mislead is necessary before there can be a finding of misleading or deceptive conduct for the purposes of the Builders' Registration Act 1939 (WA). It concluded that unintended misleading did provide cause for disciplinary action.
4 Notwithstanding Mr Ongarezos' history of involvement with various companies that had been registered as builders, the Tribunal was not satisfied that Mr Ongarezos' misleading conduct was intentional. It was thus not fraudulent, but was misleading. The Tribunal determined that a fine was the appropriate penalty for the conduct.
The allegation against the respondent
5 The respondent is a registered builder, and has been since 1980. The Builders' Registration Board (the Board) lodged an application to the Tribunal in July 2005 alleging certain fraudulent and misleading conduct. Leave to amend the application was granted at the hearing, so that the allegation the subject of the hearing was:
"That in relation to work carried out at 35 Resource Way Malaga: on or about 27 June 2002, George Ongarezos was fraudulent, or in the alternative misleading or deceptive, in that he made a false written representation to the City of Swan to the effect that he was to be the registered builder; and that on or about 6 June 2002, George Ongarezos was fraudulent, or in the alternative misleading or deceptive, in that he made a false written representation to the Mechanical Constructions Pty Ltd
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- to the effect that Concrete Precast Industries Pty Ltd was a registered builder."
6 The application to the Tribunal is made pursuant to s 12D of the Builders' Registration Act 1939 (WA) (the BR Act) which provides that the Board may allege to the State Administrative Tribunal that there is proper cause for disciplinary action, as mentioned in s 13, against a builder who is registered under the Act.
7 Section 13 of the Act relevantly provides:
"(1) In a proceeding commenced by an allegation under section 12D the State Administrative Tribunal may cancel or suspend the registration of any builder under this Act because there is proper cause for disciplinary action –
…
(d) who has been guilty of any fraudulent conduct in regard to the carrying out or completion of any building work; or
(da) who has been guilty of conduct that is harsh, unconscionable, oppressive, misleading or deceptive in relation to –
(i) a contract for the carrying out or completion of building work or a variation of that contract; or
(ii) the carrying out or completion of any building work;"
9 The amount prescribed for the purposes of s 13A is $25 000 – see reg 21 of the Builders' Registration Regulations.
Mr Ongarezos' background
10 Mr Ongarezos was born in Egypt and came to Australia at the age of 11. English was not his first language, but he commenced learning
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- English upon his arrival in Australia. He completed his learning at Perth Modern School and then went to the WA Institute of Technology where he studied civil engineering. He obtained a Diploma of Civil Engineering.
11 He worked as a civil engineer from 1972 through to 1980. His work was substantially on-site work, and included approximately five or six years with a major construction company on a large development project.
12 After obtaining his registration as a builder in 1980, he worked as a builder, having a particular interest in concrete construction. He established a company known as Slipform Constructions Pty Ltd sometime in the early 1980s. During his working life as a builder, Mr Ongarezos has been associated with a number of companies. For a period around 1994 he was a director of a company known as Queststyle Pty Ltd. That company was apparently registered as a builder.
13 He was also a director of a company called Citiworld Investments Pty Ltd. In October 1998, Citiworld Investments Pty Ltd made an application to the Builders' Registration Board for registration as a builder. Mr Ongarezos signed the application for that registration.
14 Mr Ongarezos was also a director of a company known as Grand International Construction Engineers Pty Ltd which was allotted a builder's registration number in December 1992. The application for registration was signed by Mr Ongarezos, although apparently prepared by one of his employees, or his accountant. In October 1994, Mr Ongarezos signed a letter to the Board advising that he wished to withdraw his builder's registration number as the nominee for Grand International Construction Engineers Pty Ltd as he was no longer an employee or director of that company. He also signed an agreement dated 30 November 1992 with that company to act as its registered supervisor for the purposes of the application for registration of the company as a builder.
15 In June 1992, Mr Ongarezos signed an application for registration of a company known as Grand Homes (WA) Pty Ltd, which application was granted in July 1992. He signed a number of other documents for the purpose of that application, including an agreement to act as the registered supervisor for Grand Homes (WA) Pty Ltd.
16 During the 1990s, Mr Ongarezos was also associated with a company known as Grendel Construction Engineers Pty Ltd, which was registered as a builder between September 1991 and December 1992. Mr Ongarezos signed the application for registration of Grendel
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- Construction Engineers Pty Ltd in August 1991. Some of the handwriting on that application was Mr Ongarezos', but the bulk of the handwriting was apparently completed by his accountant. Again various documents in support of the application were signed by Mr Ongarezos.
The building work at Resource Way, Malaga
17 In late November 2000, Mr Ongarezos was working as an engineer for "Toms Cranes". The principal of that company, Mr Tom Martinazzo, and Mr Ongarezos had discussions about the design and use of precast concrete slabs. In January 2002, Mr Ongarezos had discussions with a Mr Ivan Gojak who was then working for a company which dealt in precast concrete. Those discussions led to the formation of Concrete Precast Industries Pty Ltd (CPI) whose directors were Mr Ongarezos, Mr Gojak and one of Mr Martinazzo's daughters.
18 The company became involved with a job at 35 Resource Way, Malaga which involved the construction of a new building by use of tilt up panels. Mr Gojack and Mr Ongarezos prepared a quotation for the job. It was proposed that the work would be undertaken by CPI for a company known as Mechanical Constructions Pty Ltd. Mr Ongarezos said that he did not, at that time, know that CPI had to be a registered builder, but rather believed that it was sufficient if it had a director who was a registered builder and who undertook responsibility for the day-to-day management, supervision and control of the job.
19 On 6 June 2002, Mr Paul Blinco of Mechanical Constructions Pty Ltd sent a facsimile. The addressee was described as follows:
"Company: Concrete Precast Industries
Name: G Ongarezos/I Gojack"
20 The facsimile sought confirmation of various matters. The first were "insurance details" (workers compensation, public liability, professional indemnity etc), and the second was "your builder's registration number." By facsimile on the same day, CPI responded to Mr Blinco. The response advised that:
"Item 1. Our insurers are Jardine Lloyd Thompson Pty Ltd (Brokers). Details will be forthcoming.
Item 2. Builders Registration No. 5507."
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21 Mr Ongarezos said that insurance for the job was held by CPI, not himself. Builders Registration No 5507 is Mr Ongarezos' registration number. CPI was not a registered builder. It is the facsimile from CPI, which was signed by Mr Ongarezos, which is said to constitute the fraudulent, or alternatively misleading or deceptive, "false written representation" to Mechanical Constructions Pty Ltd to the effect that CPI was a registered builder.
22 Tendered by consent at the hearing was a further communication, purportedly from three trustees of family trusts, one of which was Mr Blinco as trustee for the P Blinco Family Trust to CPI dated 11 June 2002. At page 4 of that document, there is a request to "please provide a copy/proof that your organisation holds and [sic] appropriate licence/builders registration under the Building Workers Contractors Act of 1995[sic] and is current for the duration of the contract". Mr Ongarezos said in his evidence that he had not seen that document before. The copy produced in evidence is unsigned. Its origin is unclear. Its date postdates the date of the representation to Mechanical Constructions Pty Ltd the subject of complaint. It would be unreliable to place any significance or weight on that document.
23 On 27 June 2002, Mr Ongarezos signed a building licence application to the City of Swan. The application related to the property in Resource Way, Malaga. The document contains a space to enter the builder's details. Mr Ongarezos completed that document identifying himself as the builder and giving his registration number. It is that document which is said to comprise the fraudulent, or alternatively misleading or deceptive conduct by Mr Ongarezos in that "he made a false written representation to the City of Swan to the effect that he was to be the registered builder".
24 It is apparent that work on the Resource Way project then proceeded. There was no dispute that the contract for the work was undertaken by CPI. Nor does there appear to be any dispute that, up until October 2002, Mr Ongarezos did in fact act as the building supervisor for CPI on the project. For reasons which were not explored in evidence, Mr Ongarezos resigned as a director of CPI on 1 October 2002. On 10 October 2002, Mr Ongarezos sent at least three facsimiles. One was to the building department of the City of Swan. In that facsimile Mr Ongarezos said:
"I wish to inform you that I George Ongarezos has resigned as director of C.P.I. Pty. Ltd on the 1st October 2002 and therefore the above project has no registered builder. Common practice is
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- to cease all work until a registered builder is found. This is primarily to protect the interest of the owner and their asset so the rest of the work is completed to the satisfaction of the BRB of WA.
…
I have enclosed relative correspondence sent to both the client and to Concrete Precast Industries acting as the builder."
25 A facsimile was also sent to Mr Blinco on that date. That facsimile advised of Mr Ongarezos' resignation of a director of CPI and continued:
"I have since contacted the BRB and they have advised me of the following.
• A registered builder is to be nominated to complete your works immediately.
• …
• I will be notifying the City of Swan of the possible take over of another registered builder so the paperwork can be put into place correctly so no legal implications occur later on.
• I will be advising you of the directions the City of Swan wish to take."
26 The third facsimile of 10 October 2002 produced in evidence was a facsimile to Mr Gojak advising that "I have cancelled the builder's ticket on the above project and according to the City of Swan no further work is to be carried out on this project (apart from offsite work). A registered builder is to be nominated to complete the above works immediately and reapply for a new building licence and pay any related costs accordingly".
27 According to Mr Ongarezos, he also wrote to the Board but neither he nor the Board produced that letter. Mr Ongarezos' evidence in that regard is consistent with the contents of the facsimiles, in particular the facsimile to Mr Blinco of 10 October 2002. We accept Mr Ongarezos' evidence that he contacted the Board concerning his resignation as the director from CPI and its effect on the Resource Way project.
(Page 10)
The issues
28 Mr Ongarezos acknowledges that Mechanical Constructions Pty Ltd may have been misled by his facsimile of 6 June 2002 in that it may have taken the facsimile to mean that CPI was a registered builder. He says, however, that he did not intend to mislead Mechanical Constructions Pty Ltd at all when he sent that facsimile, and that he honestly believed that it was appropriate for him to provide his registration number as he was to be the person in day-to-day control of the works. Similarly, he contends that he honestly believed that, in completing the application to the City of Swan, he should include his own registration number as the builder who had responsibility for the day-to-day management of the job, and that he did not intend to mislead the City of Swan.
29 The Board contends that Mr Ongarezos' evidence in that regard should be rejected. The Board points to Mr Ongarezos' history of involvement in companies which were registered as builders prior to 2002, and invites the Tribunal to conclude that Mr Ongarezos must have known of the falsity of each of the representations and either intended to mislead both Mechanical Constructions Pty Ltd and the City of Swan, or was reckless as to the truth or falsity of the representations he made so that his conduct can be properly categorised as fraudulent. In the alternative, the Board says that if he did not intend to mislead, the representations were nonetheless misleading or deceptive. Mr Ongarezos contends that, in order to find fraud, misleading conduct, or deceptive conduct, it is necessary, in the context of the BR Act, to find an intention to mislead.
Fraudulent conduct
30 Proper cause for disciplinary action exists where a person "has been guilty of any fraudulent conduct in regard to the carrying out or completion of any building work" – BR Act s 13(d). Counsel for the Board suggested a definition of fraudulent conduct as being "an intentional dishonest act or omission done with the purpose of deceiving" a definition drawn from Butterworths Australian Legal Dictionary, Nygh and Butt (ed), Lexis Nexis Butterworths, Chatswood, 2003. During the hearing, it was suggested that an intentional dishonest act should include an act done with reckless disregard to the truth or falsity of the act. In Cambridge Building Co Pty Ltd v Builders' Registration Board of Western Australian (2000) 25 SR (WA) 21 at 31, O'Brien J expressed the view that the term "fraudulent conduct" should be given a wide meaning to accommodate a range of conduct "in regard to the carrying out or completion of any building work". Her Honour suggested that the
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- conduct was not necessarily confined to conduct which may constitute a criminal offence. She concluded that it "at least incorporates the notion of dishonesty, and on the facts of the case before her concluded that a representation made to a local authority (as to the identity of the builder of a project) which was false and was made deliberately without a belief as its truth, amounts to deceit and dishonesty and constitutes fraudulent conduct". We agree that fraudulent in the context of s 13(1)(d) involves a notion of intentional dishonesty or deceit.
Misleading or deceptive conduct
31 The proper construction of the expression "misleading or deceptive conduct" in the context of the Trade Practices Act 1974 (Cth) (the TP Act) has been the subject of much judicial clarification. In the context of that Act, and the Fair Trading Act1987 (WA) (the FT Act), it is well established that intention is not relevant to the question of whether conduct is misleading or deceptive for the purposes of that legislation – see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191-197; Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 223.
32 The respondent argued that the context of the expression "misleading or deceptive" as it is found in s 13 of the BR Act is significantly different from the context of the expression in the TP Act and the FT Act. The difference is said to lie in the fact that the conduct being dealt with in the BR Act attracts a significant penalty, namely cancellation or suspension of a registration, or alternatively a substantial fine. On the other hand, a breach of s 52 of the TP Act, or s 10 of the FT Act does not constitute an offence – see s 79(1) TP Act and s 69 FT Act.
33 Section 13(1)(da) was introduced into the BR Act by the Building Legislation Amendment Act 2000 (WA) which came into force on 1 August 2001. The same amending legislation introduced s 13A, which provided an alternative of a fine in lieu of cancellation or suspension of registration. At the time that s 13(1)(da) was introduced, the construction of the expression "misleading or deceptive" in the context of the Trade Practices legislation was well established and known. Although the words must be construed within the context of the legislation to which they are introduced, it would be surprising if the legislature intended the same expression to mean something different from the identical expression used in legislation introduced by the same Parliament in 1987. The contemporaneous introduction of the alternative of a fine, thus potentially ameliorating the consequences of a finding of cause for disciplinary
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- action, tends to suggest an appreciation that an innocent case of misleading may not warrant the severe penalty of cancellation or suspension of registration, but could properly be dealt with by a fine.
34 The context of s 13(1) itself also supports the conclusion that it is not intended that intention to mislead or deceive be an element of misleading or deceptive conduct. Paragraph (da) follows immediately after par (d) of s 13(1). As we have observed above, fraudulent conduct does involve intentional dishonesty, and would encompass most, if not at all, intentional misleading or deception. If intention to mislead is an element of misleading or deceptive conduct for the purposes of s 13(1)(da), then those words would add little to what is already covered by s 13(1)(d).
35 In our view, intention to mislead or deceive is not necessary in order to make a finding of misleading or deceptive conduct for the purposes of s 13(1)(da).
The character of Mr Ongarezos' conduct
36 Mr Ongarezos himself accepts that both his facsimile of 6 June 2002 and the application for a building licence of 27 June 2002 are misleading in the sense that they represent something which is not true. His defence is simply that he did not appreciate that at the time and did not intend to mislead. He also submits that in the event that the Tribunal finds, as it has done, that intention is not an element of misleading and deceptive conduct, and that the representations made by Mr Ongarezos were misleading and deceptive, then the Tribunal should, in any event, not find there to be proper cause for disciplinary action. He submitted that it is not incumbent on the Tribunal to find there to be proper cause for disciplinary action in every case in which a builder may have conducted himself in a misleading or deceptive manner, because otherwise any mistake made by a builder arising out of incorrect advice, while grounding a civil action, would also result in a cause for disciplinary action being made out.
37 In our view, that is the consequence of s 13(1) in its present terms. One might expect that the Board, as the regulatory authority, would exercise discretion in respect of those matters it pursued by disciplinary action. Proper discretion would avoid allegations to the Tribunal or where innocent conduct does not impact on the builders capacity or propensity to meet proper standards, or which, by their nature, would only, if established, attract a nominal fine. The clear terms of the section do however create proper cause for disciplinary action in any case of misleading or deceptive conduct in relation to the contract for the carrying
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- out or completion of building work or a variation of that contract or the carrying out or completion of any building work.
38 The allegations against Mr Ongarezos must be established on the balance of probabilities. In view of the serious consequences of the allegations made, the Tribunal must "feel an actual persuasion of the occurrence of events or the existence of facts which are an issue" before making findings adverse to Mr Ongarezos – Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-363. In relation to the fraud allegation, we are not persuaded, on the balance of probabilities, that Mr Ongarezos intended by his facsimile of 6 June 2002, or the building licence application of 27 June 2002, to mislead or deceive.
39 In his evidence, Mr Ongarezos said that the various documents he had executed in relation to particular companies with which he had been associated with in the past had been prepared by his accountants, and he named three different persons who prepared documents for him from time to time. He explained that he was essentially a "hands on" builder and left the paperwork to others. He said that he would simply sign documents which others, whom he trusted, prepared to attend to the formal requirements relating to his business. He said that he appreciated that "a company needs a number" but he seemed to have difficulty, even with the benefit of having discussed the matter with his solicitor, in appreciating the full significance of that fact.
40 Mr Ongarezos expressed very strongly his belief, held at the relevant time, that so long as the person supervising the job on a day-to-day basis, and present on site during the work, was a registered builder, then that was sufficient.
41 The BR Act does focus upon management and supervision of building work by a registered person – see s 10A, s 10B and s 10C. There is no suggestion in this case that Mr Ongarezos did not, at the time he made the representations, intend to manage and supervise the building work, nor is it in dispute that he did in fact fulfil that role up until he resigned as a director from CPI. There is much in his conduct in relation to the work, and in particular in his communications on 10 October 2002 which is consistent with the belief which he claims to have had at the relevant time. If he knew that he was breaching the BR Act by putting himself forward as the builder, it is unlikely that he would have written in the terms he did to Mechanical Constructions Pty Ltd, the City of Swan and the Board. He was clearly wrong, and now accepts that. He should have known better, given his history of dealings with different corporate
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- entities, and because he should have been thoroughly familiar with the requirements of the BR Act as they applied to his business.
42 Mr Ongarezos' oral evidence did demonstrate a degree of confusion about business structures generally and the formal requirements of the legislation. While there were some inconsistencies in his answers during what was a fairly aggressive cross-examination, we are not satisfied that his evidence, that he did not intend to mislead, should be rejected.
43 It follows that we do not find that the allegation of fraudulent conduct is made out in respect of either communication. Given that intent is not an element of misleading or deceptive conduct, the alternative allegation is made out in respect to each communication. It follows that there is proper cause for disciplinary action. This is not a case which in the circumstances warrant cancellation or suspension of registration. On the other hand, the findings we have made demonstrate a failure by the respondent to properly appreciate his responsibilities as a builder, and the operation of the legislation which governs his livelihood. A fine is the appropriate disposition and we will hear the parties as to an appropriate amount of that fine pursuant to s 13A.
Orders
1. The respondent is fined $3000.
2. The respondent is to pay a portion of the applicant's costs fixed at $1000.
I certify that this and the preceding [43] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUDGE J CHANEY, DEPUTY PRESIDENT
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