BUILDERS REVIEW BOARD OF WESTERN AUSTRALIA and CARLINO
[2007] WASAT 298
•19 NOVEMBER 2007
BUILDERS REGISTRATION BOARD OF WESTERN AUSTRALIA and CARLINO [2007] WASAT 298
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2007] WASAT 298 | |
| BUILDERS' REGISTRATION ACT 1939 (WA) | |||
| Case No: | VR:211/2006 | 23 & 24 JULY 2007 | |
| Coram: | MR C RAYMOND (SENIOR MEMBER) MR K MCGILL (SENIOR SESSIONAL MEMBER) MR P FAIGEN (SESSIONAL MEMBER) | 18/11/07 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Application granted | ||
| B | |||
| PDF Version |
| Parties: | BUILDERS REGISTRATION BOARD OF WESTERN AUSTRALIA VINCENZO CARLINO |
Catchwords: | Builders' Registration Act 1939 (WA) Application for cancellation of registration as a builder and imposition of fines totalling $52 000 31 alleged incidents of alleged fraudulent conduct alternatively misleading and deceptive conduct Grounds based on fraudulent conduct abandoned Whether proper cause for disciplinary action exist where no intent to mislead or deceive |
Legislation: | Builders' Registration Act 1939 (WA), s 12A, s 12D, s 13, s 13(1), s 13(1)(c), s 13(1)(d), s 13(1)(da) Fair Trading Act 1987 (WA), s 81 Home Building Contracts Act 1991 (WA), s 15, s 15A, Part 3A Local Government (Miscellaneous Provisions) Act 1960 (WA), s 374, s 374AAA State Administrative Tribunal Act 2004 (WA), s 87(1) Trade Practices Act 1974 (Cth), s 52, s 76 |
Case References: | Builders' Registration Board and Ongarezos [2006] WASAT 53 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 Gardam v George Wills & Co Ltd (1988) 82 ALR 415 Hawk Construction Services Pty Ltd & Anor v Builders Registration Board of Western Australia [2001] WADC 262 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 KBE Contracting Pty Ltd and Mawer & Anor [2007] WASAT 210 Kyle v Legal Practitioners' Complaints Committee [1999] 21 WAR 56 Medical Board of Western Australia and Roberman [2005] WASAT 81(S) Motor Vehicle Industry Board and Dawson [2006] WASAT 8 Orix Australia Corp Ltd v Moody Kiddell & Partners Pty Ltd [2006] NSWCA 257 Paridis v Settlement Agents Supervisory Board [2007] WASCA 97 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Re Maraj (a Legal Practitioner) (1995) 15 WAR 12 |
Orders | 1. That there is proper cause for disciplinary action against the respondent as mentioned in s 13(1)(da) of the Builders' Registration Act 1939 (WA).,2. That the respondent be finded $310.,3. The parties are granted leave to apply for costs, subject to compliance with the following orders:,(a) any application for costs is to be made in writing detailing the amount of costs claimed and the basis on which costs have been computed, and is to be accompanied by an outline of written submissions as to why such costs should be awarded;,(b) the documents referred to in (a) must be filed with the Tribunal and served on the other party on or before 7 December 2007.,4. On or before 14 December 2007, any party wishing to oppose any application for costs made by the other must file and serve an outline of written submissions as to why such costs orders should not be made.,5. Unless the Tribunal directs otherwise, any such application for costs shall be determined on the documents. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : VOCATIONAL REGULATION ACT : BUILDERS' REGISTRATION ACT 1939 (WA) CITATION : BUILDERS REGISTRATION BOARD OF WESTERN AUSTRALIA and CARLINO [2007] WASAT 298 MEMBER : MR C RAYMOND (SENIOR MEMBER)
- MR K MCGILL (SENIOR SESSIONAL MEMBER)
MR P FAIGEN (SESSIONAL MEMBER)
- Applicant
AND
VINCENZO CARLINO
Respondent
Catchwords:
Builders' Registration Act 1939 (WA) - Application for cancellation of registration as a builder and imposition of fines totalling $52 000 - 31 alleged incidents of alleged fraudulent conduct alternatively misleading and deceptive conduct - Grounds based on fraudulent conduct abandoned - Whether proper cause for disciplinary action exist where no intent to mislead or deceive
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Legislation:
Builders' Registration Act 1939 (WA), s 12A, s 12D, s 13, s 13(1), s 13(1)(c), s 13(1)(d), s 13(1)(da)
Fair Trading Act 1987 (WA), s 81
Home Building Contracts Act 1991 (WA), s 15, s 15A, Part 3A
Local Government (Miscellaneous Provisions) Act 1960 (WA), s 374, s 374AAA
State Administrative Tribunal Act 2004 (WA), s 87(1)
Trade Practices Act 1974 (Cth), s 52, s 76
Result:
Application granted
Category: B
Representation:
Counsel:
Applicant : Mr M Mannes
Respondent : Mr MD Cuerden
Solicitors:
Applicant : Mr M Mannes
Respondent : Kott Gunning
Case(s) referred to in decision(s):
Builders' Registration Board and Ongarezos [2006] WASAT 53
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Gardam v George Wills & Co Ltd (1988) 82 ALR 415
Hawk Construction Services Pty Ltd & Anor v Builders Registration Board of Western Australia [2001] WADC 262
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216
KBE Contracting Pty Ltd and Mawer & Anor [2007] WASAT 210
Kyle v Legal Practitioners' Complaints Committee [1999] 21 WAR 56
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Medical Board of Western Australia and Roberman [2005] WASAT 81(S)
Motor Vehicle Industry Board and Dawson [2006] WASAT 8
Orix Australia Corp Ltd v Moody Kiddell & Partners Pty Ltd [2006] NSWCA 257
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Re Maraj (a Legal Practitioner) (1995) 15 WAR 12
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Summary of Tribunal's decision
1 The applicant originally applied to the Tribunal under s 12D of the Builders' Registration Act 1939 (WA) seeking orders that proper cause existed for disciplinary action and that the respondent's registration be cancelled and a fine be imposed of $80 000 based on allegations of fraudulent conduct, alternatively orders were sought for the respondent's registration to be cancelled and that a fine of $52 500 be imposed in respect of alleged misleading conduct.
2 During the course of the hearing, the application was amended and the allegations of fraudulent conduct were withdrawn. The case proceeded on the basis that the respondent had engaged innocently in misleading conduct. The Tribunal rejected the respondent's submissions that the conduct in question did not constitute a representation by the respondent in terms other than that the respondent believed the certificates of insurance provided by it to the local government authorities, were genuine and that the respondent did not know of the facts which gave rise to doubt about their authenticity. The Tribunal concluded that the respondent, in providing the certificates of insurance, adopted them and consequently made representations that compulsory housing indemnity insurance was in place in accordance with the provisions of the Home Building Contracts Act 1991 (WA). The Tribunal also found that the process of applying for the issue of building licences, and therefore the provision of certificates of insurance was conduct "in respect to the carrying out or completion of any building work" within the meaning of s 13(1)(da) of the Builders' Registration Act 1939 (WA) and that for the purposes of that section, an intent to mislead was not an element of misleading conduct as referred to in that section.
3 The Tribunal concluded that cause existed for disciplinary action. A nominal fine of $10 for each of the misleading representations made by the provision of the 31 certificates of insurance by or for the respondent was imposed, that is a total fine of $310. The parties were provided with a limited time period within which to apply for costs, if so advised, having regard to the circumstances of the case.
The application and orders sought
4 The applicant applies to the Tribunal under s 12D of the Builders' Registration Act 1939 (WA) (BR Act) alleging that there is proper cause
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- for disciplinary action, as mentioned in s 13 of the BR Act, against the respondent, who is registered under that legislation.
5 The grounds of the application, following an initial amendment, were to the following effect. Firstly, the respondent carried out building work upon a number of named sites and was responsible for, and obtained, building licences in his own name in respect of such works. Secondly, that in relation to obtaining such building licences, the respondent provided to or consented to the provision of forged home indemnity insurance certificates to the respective local government authorities, which led those authorities to believe that the respondent had home indemnity insurance in respect of those sites, when in fact, the respondent did not have such insurance. Based on those facts, it was originally alleged that the respondent was fraudulent as contemplated in s 13(1)(d) of the BR Act in that in providing the certificates as above stated, the respondent did not believe in the truth of the representations, or was reckless as to whether the representations were true or false. In the alternative, it was, and remains, alleged that the respondent was misleading as contemplated in s 13(1)(da) of the BR Act in that the 31 home indemnity insurance certificates which were submitted to the respective local governments gave the impression that the respondent had home indemnity insurance in relation to the building work.
6 Based on the original allegations, the applicant sought orders that the respondent's registration as a builder be cancelled and that a fine be imposed of $80 000, in respect of the alleged fraudulent conduct, alternatively, cancellation of the respondent’s registration as a builder and that a fine be imposed of $52 500 in respect of the alleged misleading conduct.
7 As indicated, the application was subsequently amended. That occurred on the second day of the hearing - the matter having been set down for three days. The amendment was to delete the allegations relating to fraudulent conduct. Following that amendment, the applicant closed its case, and the respondent elected not to call any evidence. On the evidence presented to the Tribunal, counsel for the applicant conceded that the Tribunal was compelled to deal with the matter on the basis that the respondent had been duped by either the insurance broker, who was involved in arranging the insurance, or by some other person. The effect of this is that any misleading representation which we might find was made by the respondent, in providing the certificates of insurance to the local authorities, was made innocently. That notwithstanding, the applicant's contention is that the Tribunal should find that the respondent
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- could have taken greater care in arranging the insurance and that should be reflected in the appropriate penalty imposed, to reflect the seriousness of the situation so as to protect the public and uphold the standards of the industry.
The issues for determination
8 Subject to the amendments to which we have referred, the parties' statements of issues, facts and contentions, and submissions raise the following issues for determination.
1) Whether provision of the home indemnity insurance certificates constituted a representation by the respondent that the compulsory home indemnity insurance was in place.
2) If so, was the representation made with respect to carrying out or completion of building work within the meaning of s 13(1)(da) of the BR Act?
3) Whether s 13(1)(da) of the BR Act requires proof of an intention to mislead.
4) If no intent to mislead is required, does proper cause for disciplinary action exist in this case, and if so, what are the appropriate consequences?
Representation by the respondent
9 Proofs of evidence of Raymond Paul Barron, a co-ordinator of building approvals for the City of Stirling, and of Lyndsay James Millar, the co-ordinator statutory building services for the City of Belmont, were tendered without objection, and establish that 31 home indemnity insurance certificates were submitted by, or on behalf of, the builder and that without such certificates, the building licences would not have been issued.
10 Section 374 and s 374AAA of the Local Government (Miscellaneous Provisions) Act 1960 (WA) (LGMP Act) provide that no person shall proceed with any building without a building licence being issued in the prescribed form, and that unless the local government is satisfied that a policy of insurance is in force in respect of the work under Div 2 of Part 3A of the Home Building Contracts Act 1991 (WA) (HBC Act) it should not issue a building licence.
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11 The home indemnity insurance, referred to in the application, and evidence, is the insurance which is required under Part 3A of the HBC Act.
12 It is alleged by the applicant, and admitted by the respondent, that none of the insurance certificates were issued by an insurer authorised under the HBC Act to provide home indemnity insurance in Western Australia, although the respondent contends that he was not aware that the certificates were not authentic and that consequently he did not in fact have home indemnity insurance that complied with the requirements under the HBC Act.
13 The respondent's submission, relying on Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 (Butcher) and Orix Australia Corp Ltd v Moody Kiddell & Partners Pty Ltd [2006] NSWCA 257 (Orix) , is that the only representations conveyed by the respondent, by the provision of the certificates, were:
a) the respondent believed the certificates to be genuine; and
b) that he did not know of the facts which gave reason to doubt about the authenticity of the certificates.
14 The submission as developed, is that once regard is had to the nature of the parties, the character of the transaction and the content of the certificates, the local authorities receiving the certificates, would understand that the respondent was not conveying a guarantee or representation that he had not had a fraud perpetrated on him as to the authenticity of the certificates. Reliance was placed on the requirement of s 374AAA of the LGMP Act that it is for the local government to be satisfied that a policy of insurance is in force as a prerequisite to the issue of a building licence.
15 We are unable to accept the submissions advanced for the respondent. This is not a case as in either Butcher or Orix above, in which an agent is passing on information on behalf of another.
16 It is true that the certificates clearly purported to be issued by an insurer, and contained a statement by the insurer that a policy of insurance complying with the requirements of the HBC Act had been issued. However, when regard is had to the nature of the parties and character of the transaction, which we consider are stronger indicators, in the circumstances of this case, it is apparent that the principal beneficiary in the transaction is the respondent. The statutory scheme requires the local
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- government to be satisfied that the requisite insurance is in place, without which the builder cannot be issued with a licence entitling the builder to layout the site and commence work. The respondent, and any builder wishing to arrange insurance, is directly involved in the process. The builder needs to apply for insurance and provide all information required by the insurer as well as pay a premium.
17 In these circumstances, we consider that the correct characterisation of the transaction, is that the builder, in this case the respondent, by provision of a certificate of insurance, is in effect representing that he has arranged and obtained insurance and proof of that is established by the provision of a certificate of insurance from the insurer.
18 The respondent submitted, more specifically, that the provision of the certificates of insurance should be regarded as falling into the third category identified by McHugh J in Butcher above at [123], namely where a corporation, while believing the information ensures that its name is not used in association with the information. This was one of the three situations identified in which misleading information passed on by a person would not result in liability being visited on that person. Again, we are unable to accept the respondent's submission. The application for a building licence is made by the builder. The building licence is issued to the person carrying out the building work, and in this instance, that was the respondent. We consider it is artificial to suggest that having regard to the statutory scheme, to which we have referred above, and the necessary involvement of the builder in arranging insurance, that the builder, in this matter the respondent, is not lending his name to the representation.
19 In our view, having regard to the above, the respondent in providing the certificates of insurance adopted it and consequently makes the representation that insurance was in place in accordance with the HBC Act: see Gardam v George Wills & Co Ltd (1988) 82 ALR 415 at 427 and Butcher above, at [116].
Was the representation in relation to the carrying out or completion of building work?
20 Section 13(1) of the BR Act provides that in a proceeding commenced by an allegation under s 12D of the BR Act, the Tribunal may cancel or suspend the registration of any builder under the BR Act because there is a proper cause for disciplinary action, relevantly:
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- "(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;"
22 We accept that the process of applying for and obtaining the issue of a building licence is part of the carrying out or completion of any building work and therefore the conduct in that process which is held to be misleading or deceptive, falls within the ambit of s 13(1)(da) of the BR Act.
23 The respondent made submissions as to the proper construction of s 13(1)(da) of the BR Act (par 5 - par 10 of the written submissions), but the submissions relate more directly to the next issue, namely whether innocent conduct might be regarded as misleading or deceptive conduct within the meaning of the section. However, the submission at par 7 of the written submissions is that subsection (ii) above cannot be construed broadly, because that would have made subsection (i) unnecessary, therefore subsection (ii), must have a narrow meaning, and would not extend to provide a certificate of insurance to a local government. We do not accept that submission.
24 Subsection (i) deals with conduct relating to a contract for the carrying out or completion of building work or a variation of that contract. Subsection (ii) is not dependent on the existence of any contract, and in our view, is therefore of a wider import. The section must of course be construed within its context within the BR Act as a whole. Given the jurisdiction of the Building Disputes Tribunal established under that legislation, which also exercises jurisdiction under the HBC Act, we consider this latter legislation, is also relevant, as cognate legislation, to
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- the proper construction of the BR Act. Contractual disputes within the jurisdictional limits of the HBC Act must be dealt with under that legislation, which specifically grants remedies for unconscionable, harsh or oppressive conduct, (s 15, HBC Act) and for deceptive or misleading conduct, (s 15A, HBC Act). A separate jurisdiction exists under s 12A of the BR Act to deal with faulty or unsatisfactory workmanship, or building work that has not been carried out in a proper and workman like manner (other than it being faulty or unsatisfactory) which is not dependent upon any contractual relationship. In our view, s 13(1)(da) has been drafted in its present form to ensure that all harsh, unconscionable, oppressive, misleading or deceptive conduct connected with building work is covered in relation to any matter which might arise within the purview of either piece of legislation. We see no need to read down subsection (ii) in the manner contended for by the respondent.
25 Although the Hawk matter involved a construction of s 13(1)(c) of the BR Act, which addresses "negligence or incompetence in connection with the performance of any building work" the rationale applied in construing that phrase to include the process of applying for a building licence, has equal application in these proceedings. We conclude that the process of applying for the issue of a building licence, and therefore the provision of a certificate of insurance for that purpose, is conduct "in respect to the carrying out or completion of any building work" within the meaning of s 13(1)(da) of the BR Act.
Does s 13(1)(da) require proof of an intent to mislead?
26 As reflected in counsel for the applicant's admission to which we have referred, there is no evidence to suggest that the respondent intended to mislead the local government authorities by providing the relevant certificates of insurance.
27 The respondent submits that the section must be construed having regard to the language used, the context and the purpose of the provision. We agree with that submission. The respondent submits further that the words "misleading or deceptive" are part of a composite phrase "unconscionable, oppressive, misleading or deceptive" and in that context, should be understood as conveying a requirement for some conscious appreciation of unfairness or sharp practice.
28 Counsel for the respondent submitted that the purpose of s 13 of the BR Act is the discipline of registered builders and, in turn, the protection of the public and that no disciplinary action nor any steps for the protection of the public are called for, in the case of innocent misleading
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- or deceptive conduct which does not involve fraud or negligence. Reliance was placed on Kyle v Legal Practitioners' Complaints Committee [1999] 21 WAR 56 (Kyle) as indicating that no proper cause for disciplinary action could arise, in the absence of intent.
29 With respect, Kyle was dealing with a quite different situation, in which the Court examined the long-standing and basic precept of the legal profession that lawyers have a duty of honesty and candour to the court which over-rides their duty to the client as expressed by Ipp J in that decision at page 58 "a practitioner who knowingly misleads a court will do so dishonestly. Therein lies the unprofessional conduct". Knowledge of wrongdoing is a necessary element of a charge involving dishonesty. That bears no comparison to the circumstances in which vocational legislation, such as the BR Act, prescribes what conduct will constitute cause for disciplinary action, the reach of which must be determined by a proper construction of that legislation. The legislature can prescribe whether or not any type of contract might give rise to disciplinary action.
30 Counsel also adverted in his oral submissions, albeit very generally, to interpretations of the Trade Practices Act 1974 (Cth) (TP Act) and the Fair Trading Act 1987 (WA) (FT Act) as supporting the need for an intent, in circumstances in which it was submitted that "a defence of reasonable grounds" was provided thereunder in relation to "criminal or civil penalty provisions".
31 Counsel for the respondent was aware of an earlier decision of the Tribunal, constituted by Deputy President Judge Chaney, in Builders' Registration Board and Ongarezos [2006] WASAT 53 (Ongarezos), in which the Tribunal held that the phrase "misleading or deceptive" in s 13(1)(da) of the BR Act is to be construed as not requiring intention as an element of misleading or deceptive conduct. Counsel for the respondent submitted that it was open to the Tribunal, as presently constituted, to come to a different conclusion if satisfied that the Ongarezos decision was clearly wrong.
32 It is true that there are provisions of both the TP Act and the FT Act, which require a degree of knowledge before any form of vicarious responsibility attaches to another, who induced, or was a party to a contravention or was knowingly concerned therein: see for instance s 76 of the TP Act, the commentary thereon in Miller's Annotated Trade Practices Act, Thompson LawBook Co, 2005 at par 1.76 and following, and the FT Act, s 81. However, primary liability for damages under that legislation, as was implicit in counsel submissions, is not dependent on
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- intent to mislead: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 and Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216.
33 In our view, this distinction is not significant in considering the reach of s 13(1)(da) of the BR Act. As we have already referred to above, s 13(1)(da) is intended to enable a builder who has breached the provisions of s 15 and s 15A of the HBC Act and who has acted in the applicable manner in relation to building work to which the BR Act applies, to be disciplined. Further, as we have held, and as was decided in Hawk, above, it also reaches out to cover the applicable conduct in relation to the carrying out or completion of any building work, which includes the processes followed in applying for a building licence. There is nothing within s 15A of the HBC Act, which deals with misleading or deceptive conduct, to suggest that phrase should be given any meaning different from the same phrase used in s 52 of the TP Act: see KBE Contracting Pty Ltd and Mawer & Anor [2007] WASAT 210. Although reliance was placed on Ongarezos in that matter, the HBC Act provision does not visit any civil or criminal penalty on a person who breaches either s 15 or s 15A thereof. Accordingly, the respondent's argument for some intent to be required does not apply to those provisions, yet, in our view, s 13(1)(da)(i) is clearly intended to subject a builder to disciplinary consequences for breach of those provisions. If that is correct, why should s 13(1)(da)(ii) require intent?
34 The above factors support and reinforce the reasoning in Ongarezos. In that case, Chaney J stated as follows:
"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 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)."
35 We concur with such reasoning.
36 We accordingly find that s 13(1)(da) of the BR Act does not require proof of any intention to mislead.
The appropriate disciplinary consequences
37 The provision of forged certificates of insurance, resulting in the issuing of building licences, in circumstances in which the compulsory
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- insurance required under the HBC Act was not in place, has serious potential consequences. Those consequences have not materialised in this case, because we are told that it is possible to arrange home indemnity insurance providing the same statutory coverage even at this stage. It is not clear that the current home owners are aware of the ability to arrange such insurance. We consider that, as a starting point, that conduct, which results in 31 home owners being exposed potentially to the above risk, must be regarded as very serious.
38 Of course, the object of disciplinary proceedings is the protection of the public and the maintenance of industry standards. The maintenance of those standards is in itself conducive to the protection of the public: see the principles discussed in Paridis v Settlement Agents Supervisory Board [2007] WASCA 97 at [25]. The appropriate disciplinary consequences must necessarily depend on what is required to ensure industry standards are maintained, must demonstrate the seriousness with which the offending conduct is viewed, must deter others from acting in the same way and must protect the public. Punishment is not one of the objects of disciplinary proceedings, nor is the exacting of retribution: ReMaraj (a Legal Practitioner) (1995) 15 WAR 12 at 25.
39 In this instance, there was little which could be suggested to us by way of a means by which, on the evidence, the respondent could have avoided what occurred. Once the case of fraud against the respondent was withdrawn, as was conceded, we had to deal with the matter on the basis that the respondent had effectively been duped by someone else. It was suggested for the applicant that perhaps the respondent should have been more careful and that he should have been more directly involved in the dealings with the person who held himself out to be an insurance broker, and through whom "insurance" was arranged. The statement of the respondent signed on 16 February 2007 (doc 15 in the Bundle of Documents) was put before us by consent. That statement demonstrates that the respondent did attend at least one meeting with a person introduced to him by name (whom we shall refer to as Mr X to preserve anonymity), and as a representative of the insurance brokers. The person from the respondent's office who had most dealings with Mr X was Mr Sergio Demasi, the respondent's son-in-law, who was employed as a construction manager.
40 It was put to us on behalf of the respondent, and not objected to by the applicant's counsel, that the respondent spent most of his time on-site and that he left most of the administration to others. We understood this to be a reference to office staff generally under the supervision of
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- Mr Demasi and subsequently a new construction manager, Mr David Zacconi.
41 Generally, there can be no avoidance of culpability by someone who has overall responsibility for the operations of an entity, in this case the respondent as the registered builder and the principal of the business, by delegating responsibility to others, and avoiding knowledge of whatever occurs. However, in this case, there is nothing to suggest that the arrangement which was made, was not the optimum one for the business. Again, it was put to us, without objection, that the respondent has limited English. In those circumstances, there is no basis for us to believe that anything but the most appropriate arrangement was made for the construction manager, from time to time, to deal with the process of obtaining the compulsory indemnity insurance. Certainly, we cannot infer on the evidence that is before us, that by the respondent not being more directly involved, the risk of becoming victim to a fraud perpetrated by someone else, was increased.
42 If there had been evidence before us which showed that the respondent had deliberately avoided involvement in order not to be aware of any wrong doing, or if there was evidence which showed that the respondent had failed to put adequate procedures in place, the disciplinary consequences which would be appropriate would be significant. However, in this case, there is no point, nor would it be appropriate to impose a heavy fine, when there is nothing within the circumstances of the case and our reasons for decision, which reflect how the public could be better protected or to convey to the industry the extent to which the respondent's conduct deviated from the standard one would ordinarily expect from a competent registered builder, so that others were deterred from acting in the same way.
43 We find that the respondent has engaged, innocently, in misleading and deceptive conduct, in the manner alleged. The appropriate disposition, in our view, is the imposition of a fine, which in the circumstances, must be nominal only to reflect that such conduct constitutes cause for disciplinary action. We consider that the appropriate fine should be $10 in respect of each separate representation made by the respondent, as found above, made by the presentation of each of the 31 certificates of insurance. That is a total amount of $310.
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Costs
44 Neither party has raised the question of costs and it is therefore necessary to provide the parties an opportunity to make any application as they might be advised.
45 The usual position in relation to disciplinary action instituted by a regulatory body is that where disciplinary action is justified, there will be a strong case for the exercise of a discretion to award costs in favour of the regulatory body: see the discussion in Motor Vehicle Industry Board and Dawson [2006] WASAT 8 at [44] in which the rationale for that approach is set out. Reference is there also made to the Medical Board of Western Australia and Roberman [2005] WASAT 81(S) (Roberman) at [30]. In that discussion, Justice Barker stated that the Tribunal in Roberman had implicitly recognised that a person affected by proceedings instituted by a vocational regulatory body should not have to bear the costs of the proceedings or contribute to the costs of those part of the proceedings which were not successfully maintained. Further, that the decision in Roberman did not support the view, that an affected person in such proceedings is entitled to an award of costs for the portion of proceedings in which they were successful. Consequently, the Tribunal concluded that, ordinarily, unless it can be demonstrated that an application made by a vocational regulatory body lacked any reasonable basis, or is not made in good faith, costs should not be awarded against a vocational regulatory body simply because the application was not successful.
46 The parties should give careful consideration to the above principles in determining whether it is appropriate to make any application for costs. We will provide a limited opportunity to make any such application, so that if an application is not made within the time prescribed, the matter can be regarded as finalised. In that event, obviously each party shall bear its own costs, without there being any need for an order to be made because that is the starting point in relation to all proceedings before the Tribunal in accordance with s 87(1) of the State Administrative Tribunal Act 2004 (WA).
Orders
47 For the above reasons, the Tribunal will issue orders as follows:
1. That there is proper cause for disciplinary action against the respondent as mentioned in s 13(1)(da) of the Builders' Registration Act 1939 (WA).
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- 2. That the respondent be fined $310.
3. The parties are granted leave to apply for costs, subject to compliance with the following orders:
a) any application for costs is to be made in writing detailing the amount of costs claimed and the basis on which costs have been computed, and is to be accompanied by an outline of written submissions as to why such costs should be awarded;
b) the documents referred to in (a) must be filed with the Tribunal and served on the other party on or before 7 December 2007.
4. On or before 14 December 2007, any party wishing to oppose any application for costs made by the other must file and serve an outline of written submissions as to why such costs orders should not be made.
5. Unless the Tribunal directs otherwise, any such application for costs shall be determined on the documents.
I certify that this and the preceding [47] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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