Burke v Director General, Department of Fair Trading (No2)

[2002] NSWADT 143

CITATION:	Burke v Director General, Department of Fair Trading (No2) [2002] NSWADT 143
DIVISION:	General Division
PARTIES:	APPLICANT Kenneth Edward Burke RESPONDENT Director-General, Department of Fair Trading
FILE NUMBER:	013152
HEARING DATES:	14/02/2002-15/02/2002, 08/03/2002
SUBMISSIONS CLOSED:	03/08/2002
DATE OF DECISION:	08/16/2002
BEFORE:	Higgins S - Judicial Member
APPLICATION:	Home Builder - issue of supervisor or registration certificate - Home Building Act - home builder - issue of supervisor or registration certificate
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Home Building Act 1989 Home Building Regulation 1997 Trade Practices Act 1974 (Cth)
CASES CITED:	Burke v Director General, Department of Fair Trading [2001] NSWADT 180 Talga Limited v MBC International Limited (1976) 133 CLR 622 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Hughes & Vale Pty Ltd v The State of New South Wales (No.2) 93 CLR 127 Maurice Neville Hinchcliffe v Building Services Corporation (24 July 1997, Commercial Tribunal)
REPRESENTATION:	APPLICANT In person RESPONDENT A Wilson, solicitor
ORDERS:	The Director General's decision to refuse Mr Burke's application for the restoration of his qualified supervisors certificate is affirmed.

BACKGROUND

1 On 21 June 2001, Mr Burke lodged an application with the Administrative Decisions Tribunal (“the Tribunal”) for review of a decision, made by a delegate of the Director-General of the Department of Fair Trading (“the Director-General”), to refuse his application for the restoration of his qualified supervisor certificate.

2 Mr Burke is a director of Reef Pools (NSW) Pty Limited (“Reef Pools”), which was placed into liquidation in October 1999. Mr Burke became a director of the company on 14 October 1992 and he placed the company into administration on 24 September 1999 as it was experiencing trading difficulties.

3 Reef Pools was the holder of a contractor licence under the Home Building Act and Mr Burke was its nominated qualified supervisor for the purpose of that Act.

4 Mr Burke has worked in the building industry for 26 years. He has held a qualified supervisor certificate since 2 July 1991. Prior to this he held the appropriate authorisation under the previous legislative scheme.

5 Mr Burke’s qualified supervisor certificate expired on 20 September 2000 as Mr Burke had failed to renew it prior to that day, as required under the Home Building Act.

6 On 25 October 2000, Mr Burke wrote to the Department of Fair Trading (“the Department”) requesting that the Department change the address on his qualified supervisor certificate and requesting that they forward to him the necessary renewal forms. There does not appear to have been a response to this particular request.

7 On 22 February 2001, Mr Burke again wrote to the Department asking them to note his change of address and requesting that they forward him the renewal material. This request was responded to.

8 On 8 March 2001, Peter Smith, Manager of the Department wrote to Mr Burke and advised him that his qualified supervisor certificate had expired on 20 September 2000 and that the Home Building Act made provision for former certificate holders to apply for the restoration of the certificate, where the application was made within one year of its expiry. In that letter Peter Smith requested Mr Burke to attend the offices of the Department to be examined concerning the merits of his application for the restoration of his certificate.

9 It would appear that there were several telephone conversations after 8 March 2001 in respect of Mr Burke’s application. On 3 May 2001, Peter Smith on behalf of the Director-General wrote to Mr Burke advising him that the Director-General had determined to refuse to grant him a renewal of his certificate. In that letter Mr Smith states:

“In reaching this decision, matters regarding your involvement with Reef Pools (NSW) Pty Ltd (the Company), have been taken into consideration. The department has determined that your role in the company and your failure to take appropriate action to protect customers of the company, render you a person not fit and proper to be the holder of a qualified supervisor certificate under the Home Building Act 1989 .” (emphasis added)
10 Mr Burke then requested an internal review of the decision. On 12 June 2001, Lyn Baker, Assistant Director-General for the Director-General, wrote to Mr Burke advising him that the internal review had been completed and that she confirmed the earlier decision. In that letter Lynn Baker advised Mr Burke that the decision had been reached having regard to his involvement with Reef Pools (NSW). The letter went on to state as follows:
“The Department has determined that your role in the company and your failure to take appropriate action to protect customers of the company, render you a person not fit and proper to be the holder of a Qualified Supervisor Certificate under the Home Building Act 1989 (the Act). At the time the company was placed into liquidation there were numerous pools remaining either incomplete or defective resulting in hardship for consumers with whom the company had contracted and insurance payments to complete or rectify works contracted by the company .” (emphasis added)
11 On 7 September 2001, a preliminary hearing of Mr Burke’s application was conducted before Judicial Member G Fleming. That preliminary hearing related to the issue of whether the Tribunal had jurisdiction to hear Mr Burke’s application. It was the Department’s submission that the Tribunal did not have jurisdiction. On 1 November 2001, Judicial Member G Fleming published his decision and found that the Tribunal did have jurisdiction (see Burke v Director General, Department of Fair Trading [2001] NSWADT 180).

12 Mr Burke’s review application was then heard on 14 and 15 February 2002 and 8 March 2002.

THE RELEVANT LAW

13 Part 3 of the Home Building Act (“the Act”) makes provision for the licensing and authorising of residential building work or specialist work. Division 1 of that Part makes provision for the licensing of a building contractor and Division 2 makes provision for the certification of an individual to do and supervise residential building work or specialist work. In this regard s.24(1) expressly provides that a person may apply to the Director-General for a certificate that the “individual is qualified to do, and to supervise…residential building work”.

14 Section 27(1) provides that a supervisor certificate:

“… authorises its holder to do (and to supervise) such residential building work , …as is described in the certificate when it is issued.” (emphasis added)
15 In this case Mr Burke’s certificate authorised him to do “swimming pool building”.

16 Section 25 makes provision for the issue of a certificate. Subsection 25(2) provides that the regulations may specify the qualifications or other requirements that must be met before a supervisor’s certificate is issued. Clause 20 of the Home Building Regulations (“the Regulations”) sets out what these qualifications and requirements are. Included in this is a requirement that the Director-General is to be satisfied that the applicant is a “fit and proper person” (see clause 20(1)(c) of the Regulations).

17 Section 42 of the Act provides that an authority, which includes a supervisor’s certificate (see s.33 of the Act), once issued cannot continue in force for more than three years. Clause 31(3) of the Regulations provides that a contractor licence and supervisor certificate relating to the building of swimming pools and other specified building work is renewable annually.

18 Section 39 makes provision for the renewal or restoration of an authority, which includes a qualified supervisor certificate.

19 Subsection 39(1) of the Act and clause 31(1) of the Regulations make provision for an application for the renewal of a qualified supervisor certificate so long as the application is made within 60 days before the certificate is due to expire.

20 Subsection 39(2) of the Act makes provision for the holder of a qualified supervisor certificate to make an application to restore his/her certificate after the expiry of the certificate, so long as that application is made within one year of the expiry of the certificate.

21 S.40(1) of the Act requires the Director-General to issue a “renewed authority” to an applicant for renewal or restoration of an authority, where that application is made in accordance with the Act. As mentioned above, an “authority” includes a supervisor certificate issued under s.25 of the Act.

22 However, subsection 40(1) must be read together with the remaining subsections of that section, which so far as is relevant provide:

“(2) Despite subsection (1), the Director-General may reject an application for renewal or restoration of an authority if:
(a) further particulars requested from the applicant are outstanding, or

(b) the authority is surrendered or cancelled before it is due to expire, or

(c) the applicant would be disqualified from being the holder of the authority when the renewal would take effect, or…

(2A) …

(3) The Director-General may also reject an application for restoration of an authority if the Director-General is not satisfied that:

(a) failure to apply for renewal of the authority before it expired was due to inadvertence , or

(b) it is just and equitable to restore the authority.

(4) The Director-General may, under subsection (3), reject an application for restoration if:
(a) it requests the applicant or a nominee of the applicant to appear at a reasonable time at an office of the Department of Fair Trading or to be examined concerning the merits of the application, and

(b) the applicant or nominee fails to so attend or fails to answer any question put (whether or not at such an examination) by or on behalf of the Director-General and reasonably related to ascertaining the merits of the application.

23 Once a qualified supervisor certificate has been issued, renewed or restored, the Director-General has a power to cancel the certificate only where the certificate was issued, renewed or restored because of a misrepresentation or as a result of an error (s. 43 of the Act).

24 The only other means of cancelling or suspending a qualified supervisor certificate that is in force is by the Director-General initiating disciplinary proceedings, against the certificate holder under Part 4 of the Act, in the Fair Trading Tribunal. Such proceedings are initiated following receipt of a complaint about a certificate holder to the Director-General and the Director-General issuing a show cause notice to the certificate holder as to why he should not be dealt with under Part 4 of the Act. Under this Part of the Act, the Fair Trading Tribunal can make various orders against the certificate holder including suspending or cancelling his certificate or imposing fines in the form of penalties, where the conduct complained of amounts to “improper conduct” (ss. of the Act). “Improper conduct” is defined in ss. 51 to 54 in the Act. S. 51(1) provides that a certificate holder is guilty of improper conduct if the holder commits an offence against the Act or the Regulations, fails to comply with the requirements applicable to the building work or breaches a statutory warranty. S. 53(1) sets out what constitutes “improper conduct” by a nominated supervisor who has control over the carrying out of residential building work. It is in similar terms to s. 51(1).

ISSUES

25 Mr Wilson for the Director-General argued that the issue in this case was whether it was “just and equitable” to restore Mr Burke’s authority pursuant to s.40(3)(b) of the Act. He went on to state that this involved a consideration of Mr Burke’s conduct and whether he was a “fit and proper” person to have his supervisor certificate restored.

EVIDENCE

26 The Director-General relied on the material contained in thirteen complaint files of the Department and other material contained in its file relating to Mr Burke and Reef Pools. This material was filed with the Tribunal.

27 The Department did not call any of the complainants to give evidence and there was some argument about whether they were required to do so. Mr Burke argued that if the Department wished to rely on these complaints they were required to call such complainants so that he could cross-examine them.

28 Mr Wilson, on behalf of the Director-General, stated that Deputy President Hennessy had directed Mr Burke, at a directions hearing, to advise the Director-General which complainant he wished to be made available for cross-examination. As Mr Burke had not made any such request, the Director-General had no complainants available for cross-examination.

29 After some discussion it was agreed that the matter should proceed and that the Tribunal would consider the complaint material relied on by the Director-General and would give it the appropriate weight having regard to the form they were in and the other evidence before the Tribunal, including the oral evidence of Mr Burke.

30 In addition to the abovementioned material, the Department relied on an affidavit of Donald John Van Keimpenna, an assistant technical investigator employed by the Department. In his affidavit Mr Van Keimpa sets out, from his experience in the building industry, what the functions of a nominated qualified supervisor would include. These he said included:

“(a) carry out residential building work in the course of employment of a licensed contractor/builder;

(b) supervise other employees of the licenced builder and subcontractors to that contractor/builder;

(c) interface with the owner, the licensed contractor/ builder and sub-tradesmen regarding the building work;

(d) quantify and certify the provisional allowance items of a contract, such as the amount of rock excavated or pierring carried out so that the builder is able to correctly charge the owner;

(e) verify the accounts by trades and supplies;

(f) co-ordinate the various trades;

(g) maintain records of events on sites such as wet weather; instructions by officers of statutory authorities, architects and engineers; and

(h) comply with the requirements of the Home Building Act.”

31 The Director-General also called Mr Keith Schoenmaker, an investigator with the Department, who has had some involvement with the Department’s investigation into the complaints received against Reef Pools and Mr Burke. However, Mr Schoenmaker did not personally speak to all of the complainants and he had only inspected one particular pool.

32 Mr Burke also gave oral evidence and made himself available for cross-examination. Otherwise he did not produce any other evidence.

33 The material relied on by the Director-General in making his decision fell into two categories. The first related to specific complaints received from former customers of Reef Pools. The second related to conduct by Mr Burke in his capacity as the Managing Director of Reef Pools.

Complaints

34 As mentioned above, on 24 September 1999, Reef Pools was placed into administration, and then into liquidation (by its creditors) on 21 October 1999.

35 It was not disputed that Reef Pools was experiencing financial difficulties in 1998. In April 1999, to alleviate some of these difficulties, it sold the use of its name to Blue Haven Pools Pty Limited and assigned many of its contracts to build pools, to Blue Haven. The contracts that were assigned were those, which Reef Pools had not yet commenced to work on and those where a small amount of work had been done. The remaining contracts, Reef Pools, sought to complete.

36 It is also not disputed that on 13 August 1999, the television program “A Current Affair” ran a segment on Reef Pools, at the instigation of several dissatisfied customers of Reef Pools. These customers were also very critical of the manner in which Mr Burke dealt with them.

37 According to a Departmental briefing note dated 4 August 1999, the Department had received 21 complaints against Reef Pools since it had been issued with a contractors licence in 1991. The briefing note goes on to state that all of these complaints had been concluded. The same briefing note makes reference to the April 1999 arrangement with Blue Haven Pools and Spas Pty Limited. The briefing note states that this company was issued with a contractor licence in 1990 and had been the subject of 111 complaints, of which 5 remained unresolved. It is stated that this was not a significant number of complaints given the volume of pools and spas that the company built.

38 In respect of complaints received by the Department prior to 4 August 1999, the Director-General relied on the following six complaints:

(a) Mr Addamo’s complaint was lodged with the Department on 27 March 1997. Mr Addamo’s complaint was that the pool installed by Reef Pools in 1995 had been installed with a 4 year old pump when he had contracted to be supplied with a new pump. He requested that Reef Pools replace the pump with a new pump and re-imburse them for the chemicals they had used unnecessarily. No allegations were made against Mr Burke personally and Mr Burke stated that Reef Pools paid for the replacement of the pump with a new pump. There does not appear to be a dispute that a pump supplier and not Reef Pools supplied the pump in the first instance and Mr Burke’s submission was that the supplier and not Reef Pools was at fault.

(b) On 18 March 1998, it would appear that Mr and Mrs Humphries lodged a complaint with the Department. The complaint is unsigned and attached to it is an unsigned letter of complaint. The complaint relates to access to their yard through the neighbour’s property and the removal of debris from their property. They had originally negotiated their contract with a person called Steve, who assured them that Reef Pools would remove the debris without cost. Subsequently, they dealt with Mr Burke who told them that they had to pay $2,000 for the removal of the debris. The Humphries’ lost confidence in Reef Pools and asked to be released from their contract, to which Mr Burke responded that they would have to pay Reef Pools $6,000, in addition to losing their deposit. Subsequently Mr Burke allegedly agreed to the Humphries being released from their contractual obligations without any cost, but then retracted his agreement and forwarded to them for signature a letter of release that required them to pay $6,000 minus the deposit that had already been paid. They complained about Mr Burke’s rudeness and aggressive behaviour towards them. The matter was resolved and Mr Burke denied that he was rude;

(c) Mrs Curtis lodged a complaint with the Department on 21 January 1999. The essence of her complaint was that Mr Collins, who was acting on behalf of Reef Pools, misrepresented the prices to be charged for certain items (e.g. tipping fee), the sufficiency of the work to be done (e.g. fencing) and the amount of materials required (e.g. paving). As a result she paid more for tipping, had an inadequate fence and purchased more pavers than she needed. In response, Mr Burke pointed to the words of the contract and stated that the dispute was resolved. According to the Department’s file it would appear that resolution was through Mrs Curtis seeking compensation from Reef Pool’s insurer. I also note that Mrs Curtis stated that she was not complaining about the workmanship but was complaining about the conduct of Ossie Collins, the person negotiating with them on behalf of Reef Pools and Mr Burke’s deliberate delays in doing the work;

(d) Mr and Mrs Logue’s complaint was lodged with the Department on 2 February 1999. Their complaint related to delays in the completion of their pool and the extreme rudeness of Mr Burke. In their letter of complaint they state:

“This is the second lot of school holidays we have sat at home waiting for our pool to be finished.

…

All progress payments have been made and no further payment due until handover.

Please help us put an end to this nightmare we now find ourselves in with no end in sight.”

Mr Burke acknowledged that he had had heated conversations with Mr Logues. He said that when the pool had not been completed by the time of Mr Logues daughter’s birthday that Mr Logue made it as difficult as he could. He too was abusive and threatened to advertise that Reef Pools could not complete a pool within the time contracted for. Mr Burke did not undertake the work but stated that days were lost because of bad weather. However, he did not produce any evidence to support this;

(e) Mr Williams lodged a complaint with the Department on 19 February 1999. The complaint related to the time taken to complete the pool and misrepresentations made by Reef Pools in respect of the equipment that was to be supplied and the functioning thereof. I note from the Department’s file that there was some exchange of correspondence between Mr Williams and Mr Burke in respect of the contractual obligations between the parties. It would appear that Mr Williams and other disgruntled customers of Reef Pools subsequently jointly met with a reporter from “A Current Affair” in late July 1999. After that program, on 2 September 1999, Mr Williams again forwarded a chronology of events to the Department concerning his dealings with Reef Pools and Ken Burke and his son Glen.

(f) On 13 May 1999 Mr Rizzo lodged a complaint with the Department. The complaint listed numerous deficiencies in the construction of the pool. From the Department’s file it would appear that the complainant was mainly concerned about making an insurance claim for defective workmanship, supply of wrong fittings and incomplete work on the capping surrounding the pool.

39 Within a matter of 5 to 6 weeks of 4 August 1999 Ministerial Briefing, the number of complaints received by the Department against Reef Pools and Mr Burke increased significantly (see the Departmental briefing note dated 14 September 1999, where the Department refers to a list of 81 dissatisfied Reef Pool customers). The change followed the “A Current Affair” program and receipt of numerous complaints through a member of Parliament. It would appear that Mr Williams, who had complained to the Department earlier in the year had organised a small group of dissatisfied customers to approach “A Current Affair” and their local member of Parliament.

40 The seven complaints relied on by the Department that were lodged after 13 August 1999 were as follows:

(a) Mr Abdalla’s complaint was lodged with the Department on 26 September 1999. He had contracted with Reef Pools in February 1999 and in May 1999 he was advised by Blue Haven Pools that they had taken over the contract and that they would not credit him the deposit he had paid to Reef Pools. That deposit amount was $1,897;

(b) Mrs Beadle’s complain was lodged with the Department on 22 September 1999. In this case Mrs Beadle states that Reef Pools had installed the concrete shell of the pool in March of that year and that it had not been sealed properly. Mr Burke stated that this was a warranty problem and while Mrs Beadle states Mr Burke visited the site in June 1999 and demanded payment of the outstanding contract price, Mr Burke states he cannot recall visiting her;

(c) Mr Field’s complaint was lodged with the Department on 2 December 1999. He complained about the deterioration of the aqua quartz surface of his pool. This work had been done by Reef Pools in late 1996. Mr Burke stated that he had had no involvement with this pool;

(d) It would appear that some time in late August 1999 Mrs Howell contacted the Department about Reef Pools. There is on file an unsigned letter from Mrs Howell giving details about her complaint. It would appear that she dealt with Mr Burke. Mr Burke stated that Mrs Howell’s pool was commenced in November of 1998 and while he was not involved in this work he later became involved as the excavation work had to be done again due to a collapse of the walls following rain. He said that pursuant to the terms of the contract Mrs Howell was required to pay for this extra work. He was not sure if the work was completed prior to the company being placed in liquidation;

(e)Mr Lehn’s complaint was lodged with the Department on 25 November 1999. He complained about waterline cracks in the pool which was built in 1996. These cracks resulted in the tiles cracking. He contacted Reef Pools only to be told that they had gone out of business;

(f) The Department’s file for a complaint from Mr and Mrs Phillips contains an unsigned and undated chronology of events relating to the building of their swimming pool by Reef Pools and conversations with Mr Burke. The last entry on the chronology is dated 21 September 1999 so I presume that it was lodged with the Department some time after this.

Mr Burke said that he did not have any contact with Mr and Mrs Phillips until after the pool had been put in. This is consistent with the chronology. Their complaint related to long delays and the failure to have a retaining wall built to which prevented soil from being washed into the pool when it rained. Mr Burke denied that he was rude to Mrs Williams and spoke to her in the manner stated in the chronology.

Mr Burke stated that he did not have any involvement in the construction of this pool. However, he did acknowledge that he inspected the pool after the complaint had been lodged.

(g) Mrs Waller lodged a complaint with the Department some time in early December 1999. In this case the Department’s file contains a signed statement from Mrs Waller. In the statement Mrs Waller complains about delays in construction and rudeness of Mr Burke when she asked him to repair damage that had been done to her lawn area by contractors engaged by Reef Pools. Mr Burke denies that he made the alleged abusive comments.

Mr Burke’s conduct in his capacity as the Managing Director of Reef Pools

41 Mr Wilson, for the Director-General pointed to documents in the Department’s file, which showed that Reef Pool letter head had printed on it the Swimming Pool and Spa Association of Australia Limited (SPASA) logo. It was not disputed that prior to 1997, Reef Pools was a member of this industry association. However, it ceased to be a member after this date and was refused membership of the NSW Association, which replaced the national body. Despite this, Reef Pools continued to use this logo on its letterhead in 1997 and 1998.

42 In April 1998 the solicitor for the NSW Industry Association wrote to Mr Burke informing him that the use of the SPASA logo was misleading and in breach of s53(d) of the Trade Practices Act. A similar complaint was lodged with the Department. On 4 June 1998, Glenn Burke, the son of Mr Burke, wrote to the Department acknowledging that the SPASA logo on the letterhead could be misconstrued and that they would “blot out” the logo on the existing stationery and that they would order new stationery, which did not have the logo. Despite this assurance, there are letters of Reef Pools dated after this date, which do not have the logo blotted out. Mr Burke stated that he gave instructions to his office staff that these were to be blotted out. He suggested that the letters held by the Department were perhaps mistakes or errors.

43 During cross examination, Mr Burke stated that he was not involved in the day to day contracting for pool constructions or the day to day supervision of their construction on behalf of the company. He stated that this was done by persons contracted by Reef Pools who were also holders of a qualified supervisor certificate under the Act. He stated that his role was an overall supervisory one where he was called in after a problem had occurred and where it could not be resolved between the client and the contractor.

44 He acknowledged that according to the information given by him to the Department that he was the nominated qualified supervisor certificate holder for the company. He stated that he was unaware of the need to inform the Department of every holder of a qualified supervisor certificate who was used by the company.

45 Mr Burke also stated that following his wife’s suicide death in late 1997 he had his eye “off the ball” for some time, which led to the company’s business being run down and not as well organised as it could have been. He stated that he tried to turn this around in 1999 by selling the business name to Blue Haven Pools Pty Limited in April 1999 and assigning numerous contracts to them. However, the 13 August 1999 “A Current Affairs” program “finished” the business off. It was after this that he appointed an administrator, from which the appointment of a liquidator arose.

46 The Department’s file contains a report from the liquidator dated 5 December 2000. In that report the liquidator pointed out that Mr Ken Burke and his son Glenn Burke were the directors of Reef Pools and that Ken Burke was also a director of another company, K. E. Burke & Associates (“KEB”). Glenn Burke also held another directorship in Bakro Holdings Pty Limited (“Bakro”). According to the liquidator, in the months before Reef Pools went into liquidation, Mr Burke had withdrawn a sum of $275,000 and then $40,000 from the company’s account. Mr Burke stated at the hearing that this amount represented proceeds of the sale to Blue Haven Pools, which the company owed him.

47 The liquidator also noted that a sum of $70,000 was paid out of the company’s accounts to Bakro after Glenn Burke resigned as a director in April 1999. The liquidator conducted a public examination of Ken Burke and Glenn Burke. In respect of his examination of Ken Burke the liquidator stated inter alia

“Ken Burke was unable to refer to any records showing a debt from Reef to KEB other than some unidentified diary notes or note pad notes which are now destroyed. This would indicate that Ken Burke was not entitled to withdraw $275.00.00 from Reef on behalf of KEB.

…Ken Burke stated that he viewed Reef’s business as his own and this entitled him to do as he pleased. Ken Burke also stated that he made a number of cash payments from the $275,000.00 taken by him but was unable to give clear prticulars.

…Ken Burke agreed that Reef did not keep records that would adequately explain the appropriations by him of $275,000 and $40,000”

SUBMISSIONS

48 Mr Wilson, on behalf of the Director-General, provided written submissions. He added to these during oral submissions. In essence he submitted that the material in the Department’s file demonstrated that Mr Burke, in his capacity as the nominated supervisor certificate holder, had caused Reef Pools to engage in misleading conduct. However, the more serious allegation was that the numerous complaints received by the Department showed that Mr Burke did not have the ability to perform the task of a qualified supervisor certificate holder because of his rudeness and offensive behaviour towards customers.

49 Mr Wilson submitted that these were all matters coming within the Director-General’s discretion under s40(3)(b) of the Act as the Act is a protective jurisdiction and therefore deals with the way the Applicant deals with and treats its customers.

50 It should be noted that the Director-General had no complaint about Mr Burke’s technical building skills.

51 Mr Burke also provided written submissions and added to them orally. He was critical of the Department’s conduct in its investigation. He denied being rude to customers and urged the Tribunal to have regard to the fact that he had been working in the industry for 26 years and that he had numerous satisfied customers. This he said demonstrates that the complaints on which the Department relied primarily resulted from “A Current Affair’s” report, for which he was given no opportunity to defend himself. He submitted that “rudeness” was not a ground for refusal and that prior to the company being placed in administration there had been no complaints about his manner in dealing with customers.

REASONS FOR DECISION

Legislative Framework

52 As set out above the Home Building Act provides that once a qualified supervisor’s certificate for pool building has been issued it remains in force for 1 year (ss. 25 and 42 of the Act and clause 31(3) of the Regulations). That certificate can then be renewed if:

(a) the certificate holder applies for a renewal within 60 days of the expiry of the certificate (s.39(1) of Act and clause 31(1) of the Regulations); or

(b) the certificate holder applies, no later than one year after the expiry of his certificate for the certificate to be restored (s.39(2) of the Act).

53 If the certificate holder’s certificate involving pool building is renewed or restored it remains in force for another year. The certificate holder can then again apply for his/her certificate to be renewed or restored for a further year. This is an ongoing process and each time a certificate holder makes an application for renewal or restoration the Director-General is required to renew the certificate (s.40(1) of the Act) unless, in the exercise of the discretion vested in him, he decides not to renew or restore the certificate for one or more of the reasons set out in ss.40(2) and (3) of the Act.

54 The discretion vested in the Director-General under s.40(2) expressly applies to both an application for renewal and an application for restoration. In my opinion, having regard to the structure of the Home Building Act the simple reason for this is that an application for restoration is in effect an application for renewal, the only difference being that a restoration application is made after the term of the certificate has expired requiring the Director-General to have regard to the additional factors that are set out in s.40(3) of the Act.

55 One of the matters to which the Director-General may have regard to in exercising his discretion under s.40(2) of the Home Building Act is that the applicant for renewal or restoration would be “disqualified” from being the holder of the certificate when the renewal took effect (see s.40(2)(c) of the Act).

56 Again, having regard to the structure of the Home Building Act, in my opinion, this subsection relates to those provisions which refer to the qualifications and requirements that an applicant for a certificate must satisfy before the Director-General is able to issue the certificate. These are contained in s.25(2) and (3) of the Act and clause 20 of the Regulations. As mentioned above, one of the matters of which the Director-General must be satisfied in order to issue a certificate that the applicant is a “fit and proper person” (see clause 20(1)(c) of the Regulations).

57 On the other hand, the discretion vested in the Director-General under s.40(3) of the Act only applies where the certificate holder has applied for a restoration of his/her certificate. As I have already mentioned, this discretion is in addition to that which is vested in him under s.40(2) of the Act. In this case the Director-General’s discretion is such that he may reject the application for restoration if he is not satisfied about the matters referred to in paragraphs (a) and (b) of that section. One of those matters is that he is not satisfied that the applicant’s failure to renew his certificate before it expired was due to inadvertence (s.40(3)(a) of the Act). The other is that he is not satisfied that it is just and equitable to restore the certificate.

58 The discretion in s40(3) of the Act is couched in the negative and in order to exercise that discretion the Director-General would need to make a finding on the material before him that the applicant’s failure to apply for a renewal was not due to inadvertence and that it was not just and equitable to issue the certificate.

59 The terms “just” and “equitable” are not defined in the Act. However, s.40(4) of the Act prescribes certain matters to which the Director-General may have regard in exercising his discretion under s.40(3) of the Act. These matters relate to the applicant’s failure to attend the offices of the Department or failure to answer questions put to him on behalf of the Department.

60 The term “just” is defined in the Concise Oxford Dictionary (10th Edition) to mean “morally right and fair – appropriate or deserved”. The term “equitable” is a derivative of the term “equity” which is defined in the New Shorter Oxford English Dictionary to mean “fairness impartiality, even handed dealing – that which is fair and right”.

61 I agree with the submissions made by Mr Wilson on behalf of the Director-General that the discretion conferred on the Director-General under s.40(3)(b) of the Act (the “just and equitable” discretion) is a wide discretion (see Talga Limited vMBC International Limited (1976) 133 CLR 622 at 629). However, I do not agree that the discretion in the context of the provisions in this Act includes consideration of whether the applicant is a fit and proper person.

62 For the reasons set out above, in my opinion, this is a matter falling within the Director-General’s discretion under s.40(2)(c) of the Act.

63 Accordingly, in my opinion, where the Director-General is giving consideration to an application for restoration of an authority, he must first consider the matters contained in s.40(2) of the Act. Then if there is no basis on which the application for restoration should be refused under this subsection he must have regard to those matters those contained in s.40(3).

Fit and Proper

64 The Tribunal’s function is to determine whether the Director-General’s decision is the correct and preferred decision. In this case the Director-General based his decision on whether Mr Burke was a “fit and proper” person. While I do not agree that this is a matter for consideration under s40(3)(b) it is relevant for the purpose of s40(2)(c).

65 It has long been accepted that the expression “fit and proper” person takes its meaning from its legislative context – see Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321. In Bond’s case Toohey and Gaudron JJ stated at page 380:

“The expression “fit and proper person”, standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of “fit and proper” cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.” (emphasis added).
66 In Hughes & Vale Pty Ltd v The State of New South Wales(No. 2) 93 CLR 127 at 156 Dixon CJ, McTiernan and Webb JJ said, in relation to the “fit and proper person” test that its purpose:
“…is to give the widest scope for judgment and indeed for rejection. “Fit” (or idoeneus) with respect to an office is said to involve three things, honesty, knowledge and ability: “honesty to execute it truly, without malice, affection or partiality; knowledge to know what he ought duly to do; and ability as well as estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it.” (emphasis added).
67 The purpose of the Act is to regulate the residential building industry so as to protect consumers against defective and unsafe workmanship. In my opinion, the Act requires the Director General, who is given the task of issuing the relevant authorities Act, to have regard not only to the persons ability to do the work but also his honesty and integrity in performing the tasks that the person is authorised to do.

68 As stated by the Commercial Tribunal in Maurice Neville Hinchcliffe v Building Services Corporation (24 July 1997) the holding of a qualified supervisor certificate is taken to be evidence that the person “ can be held out to the public not as being not only possessed of acceptable building expertise but is a person of integrity and honesty.”

69 As mentioned above, in this case, by virtue of ss24(1) and 27(1) of the Act, Mr Burke’s qualified supervisor certificate authorises him “to do” and “supervise” swimming pool building.

70 What the certificate did not entitle him to do was to contract with consumers to build a swimming pool. Only Reef Pools, who was the holder of a contractor licence issued under Division 1 of Part 3, could contract with consumers. However, that process was facilitated by those contracted or employed by it.

71 Despite the Department not having called any of the complainants it cannot be ignored that the Director General received numerous complaints about Reef Pools, which Mr Burke was the director and controller of. Some of the complaints also included complaints about Mr Burke’s behaviour towards customers. The majority of these were lodged after the “A Current Affair” programme, but there was a sufficient number of these before that time. According to the Department’s own evidence complaints are not unusual in this industry and there is a disciplinary and dispute regime under which complaints may be dealt with. In this case Reef Pools have been placed in liquidation left the consumers without an avenue to seek redress from Reef Pools. They were required to resort to insurance claims.

72 However, this does not detract from the Director General’s responsibility to examine whether a person is a “fit and proper” person to be issued with a renewal of his authority or licence under the Act.

73 In this case, on his own evidence, Mr Burke admitted that he did not supervise the work that Reef Pools had contracted to do. He was there to sort out problems that could not be solved and otherwise he relied on those who had been subcontracted to do that work on behalf of Reef Pools. This was so even though each year, since 1991, he had held himself out as the nominated qualified supervisor for the company. At no time did he advise the Department otherwise.

74 Accordingly, it was his responsibility and not that of the subcontracted supervisors to ensure that the work that was being undertaken on behalf of his company was in fact being done and done properly. This he did not do, which undoubtedly led to the number of complaints that had been made.

75 The fact that the Department did not call any of the complainant’s does not mean that the contents of those complaints should be rejected. These are not proceedings in which it is necessary for the Department to prove the truth of the allegations that were made by the complainants. The Department has merely relied on the complaints as being indicative of the manner in which Mr Burke conducted his business of pool building.

76 Mr Burke had every opportunity to give his version of events, which he did. And in doing so Mr Burke refused to acknowledge any wrong doing on his or his company’s behalf. He placed greatest emphasis on the terms of the contract and said that if the customer became aggressive so did he. He acknowledged that some of the sub-contractors had acted incorrectly but held the view that this was their responsibility and not that of his company. He stated that he had numerous satisfied customers but produced no evidence in this regard.

77 The question is whether Mr Burke’s failure to undertake his responsibilities, as the nominated qualified supervisor of Reef Pools, and his conduct as a director of Reef Pools makes him unfit to be issued with a renewal of his certificate.

78 In my opinion, on balance, it does.

79 The complaints in my opinion discloses a pattern of behaviour, from which it cannot be said that Mr Burke has dealt with his customers with complete honesty and integrity. The behaviour can be summerised as failure to respond or adequately respond to customer complaints, failure to ensure that building work was carried out within the time promised, failure to rectify defective building work, failure to supervise his salesmen and other subcontractors and intimidating behaviour towards customers. These complaints go beyond what could be described as contractual disputes, but they relate to the manner in which he performed his authorised activities. All in all Mr Burke demonstrated a measure of contempt for any customer who complained. To let the market decide about his behaviour is not an answer for protective jurisdiction such as this.

80 As a qualified supervisor, without any responsibility for or direct involvement in the licenced contractor, his role will continue to be to deal with customers and subcontractors. In my opinion Mr Burke’s evidence does not give the Tribunal any confidence that he will deal with these people any differently to what he had previously.

81 In respect of allegations of deceptive conduct, there is no question that Reef Pools used the SPASA logo when it was not entitled to do so. Mr Burke stated that he gave a direction that the logo was to be blotted out, but whether he ensured it was done is not clear. There is no evidence that Mr Burke was personally responsible for this deception. However, as the director of the company he had a responsibility to ensure that it did not happen.

82 I have had regard to Mr Burke’s action in selling Reef Pool contracts to Blue Haven Pools in April 1999. In one way this can be seen as a step towards protecting these customers. However, on his own evidence he did not inform these customers of this having taken place and for the reasons stated below it would appear that the action was ultimately for the benefit of his son and himself, through companies they controlled.

83 An issue of concern are the comments made by the liquidator of Reef Pools about Mr Burke and his son taking funds out of the company in the months before it was resolved that the company be wound up (i.e. 29 October 1999). In light of what the liquidator said in respect of these funds it is difficult to accept Mr Burke’s statement that the “A Current Affair” programme finished the company off. In my opinion this was clearly not the only reason.

84 Otherwise, there is no evidence that Mr Burke in a way delayed in making his application and there is no evidence that he failed to cooperate with the Department after he was issued with the letter dated 8 March 2001 requesting him to answer questions in regard to his application.

85 Although Mr Burke is no longer a director of a licenced contractor, for the reasons stated above, his conduct as a director and nominated qualified supervisor of Reef Pools is such that in my opinion it can not be said that he is a fit and proper person to be the holder of a qualified supervisor certificate under the Act.

86 Accordingly, in my opinion decision of the Director General to refuse to restore Mr Burke’s qualified supervisor certificate is the correct and preferred decision.

87 I order that the Director General’s decision in this regard be affirmed.