Commissioner for Consumer Affairs v McLean

[2007] SADC 32

DISTRICT COURT OF SOUTH AUSTRALIA

(District Court Administrative and Disciplinary Division)

COMMISSIONER FOR CONSUMER AFFAIRS v MCLEAN

[2007] SADC 32

Judgment of His Honour Judge Lovell

(Assessor Mr J Dames and Assessor Mr C Stone)

28 March 2007

ADMINISTRATIVE LAW

Building Work Contractors Act 1995.

Complaint against a licensed building work contractor alleging various breaches of the Act - allegations found proved – defendant prohibited from being a director of a body corporate that is a building work contractor until further order.

Building Work Contractors Act 1995 ss 6(1)(a), 9, 21(1)(c), 25, 28, 30, 34, referred to.

COMMISSIONER FOR CONSUMER AFFAIRS v MCLEAN
[2007] SADC 32

Background

1. The Commissioner for Consumer Affairs made a complaint against the Respondent John Roger McLean alleging a series of breaches of the Building Work Contractors Act 1995.

2. By way of background this matter was listed for full hearing on 19 September 2006 before his Honour Judge Boylan. On that date Mr McLean attended and requested an adjournment. Prior to that date there had been a history of non-attendance by Mr McLean. His Honour Judge Boylan adjourned the matter to enable Mr McLean to obtain legal advice. He adjourned the matter to Wednesday 18 October 2006.

3. On that date the matter came on before his Honour Judge Clayton. Mr McLean failed to attend. The matter was adjourned to 8 November 2006 for a full hearing. A letter was sent by the Courts Administration Authority to the last known address of Mr McLean but it was returned with a note indicating that he had left the address and there was no forwarding address.

4. On 8 November 2006 once again Mr McLean failed to appear. His name was called outside the court.

5. Ms Costi who appeared on behalf of the Commissioner for Consumer Affairs sought leave to proceed in his absence. Given the history of non-attendance the Court gave leave for the case to proceed in the absence of Mr McLean but that at the close of the Commissioner’s case the matter would be adjourned and a final attempt be made to contact Mr McLean.

   The Hearing

6. The complaint of the Commissioner for Consumer Affairs dated 5 May 2006 alleged that there was proper cause for disciplinary action against John Roger McLean, a licensed building work contractor, (the Defendant) in respect of 13 separate counts or matters of complaint. Ms Costi tendered various statements and exhibits relating to each count.

7. Count 1 alleged that Mr McLean would not be entitled to a licence if he applied for one as on 13 February 2006 he had been declared bankrupt. Evidence tendered proved the allegation.

8. Counts 2 and 3 related to the Langdon contract. It was alleged in count 2 that between 17 January 2002 and 30 November 2004 Mr McLean acted contrary to the Building Work Contractors Act 1995 in the course of conducting the business of a building work contractor contravening ss 6(1)(a), 28, 30, 34 and 21(1)(c). The essence of the complaint in these counts was that Mr McLean contracted to perform work outside of the scope of his licence. Further, the total value of the contract in this matter was $22,000 which then enlivened obligations to have building indemnity insurance, to ensure the contract was in writing and to accept payments in accordance with the Act. Mr McLean on the evidence presented before the Court did not comply with those obligations.

9. Count 3 alleged that Mr McLean acted improperly in that he did not complete the work and the consumer was left about $4,000 “out of pocket”. The evidence tendered proved the allegations in counts 2 and 3.

10. Count 4 related to the Shipway contract. It was alleged that between 1 October 2003 and 31 December 2003 Mr McLean acted improperly in the course of conducting the business of a building work contractor in breach of s 21(1)(c) of the Building Work Contractors Act 1995. The evidence in relation to this matter showed that Mr McLean entered into a contract to build a pergola. He was paid a total of $2,000 but did not complete the work. The evidence proved the allegations.

11. Count 5 related to the Helbig contract. It was alleged that between 1 December 2003 and 31 January 2004 Mr McLean acted improperly in the course of conducting the business of a building work contractor contrary to s 21(1)(c) of the Building Work Contractors Act 1995. As with count 4 the evidence showed that whilst he was authorised to perform the work the Defendant failed to complete the work. Ms Helbig apparently paid by way of deposit $3,500 to the Defendant who delivered some wood to the premises but then failed to complete the project. The evidence proved the allegations.

12. Counts 6 and 7 relate to the Davies contract. In relation to count 6 it was alleged that between 1 March 2003 and 2 December 2005 the Defendant acted in contravention of ss 21(1)(c), 28, 30 and 34 of the Building Work Contractors Act 1995. The Commissioner had taken action against Mr McLean in relation to this contractual matter in the Magistrates Court and on 2 December 2005 the Defendant was actually convicted of offences under ss 28, 30 and 34(b) of the Building Work Contractors Act 1995. It was the convictions that founded the allegations in count 6. The conduct related to demanding payments to be made under a domestic building work contract when such payment was not authorised by the Act. Mr McLean also failed to comply with the requirements of the contract and did not take out the appropriate policy of insurance.

13. Count 7 alleged that between 1 March 2003 and 2 December 2005 Mr McLean acted improperly in the course of conducting the business of a building work contractor in contravention of s 21(1)(c) of the Building Work Contractors Act 1995. Once again the evidence demonstrated that the Defendant failed to complete work that he had contracted to perform. The evidence tendered proved the allegations in counts 6 and 7.

14. Counts 8 and 9 relate to the Goldsby contract. Count 8 alleged that between 1 June 2003 and 2 December 2005 the Defendant acted contrary to the Building Work Contractors Act 1995 in the course of conducting the business of a building work contractor in contravention of ss 6(1)(a), 28, 30, 34 and 21(1)(c) of the Building Work Contractors Act 1995. Count 8 again relates to matters which were also dealt with in the Magistrates Court. The offences included the carrying on of a business as a building work contractor without being authorised by way of licence. In other words he performed work outside the scope of his licence. Again he was convicted of demanding payment to be made under the contract when such payment was not authorised, failing to comply with the contract and not providing the appropriate insurance.

15. Count 9 alleged that Mr McLean acted improperly in the course of conducting the business of a building work contractor in contravention of s 21(1)(c) of the Building Work Contractors Act 1995. As with some of the previous matters the evidence showed on this occasion that Mr McLean again did not complete the building work he had contracted to perform for Mr Goldsby despite some payment. The evidence tendered proved the allegations in relation to counts 8 and 9.

16. Counts 10, 11 and 12 related to the Arnold contract. Count 10 alleged that between 27 July 2005 and 31 January 2005 Mr McLean acted contrary to the Building Work Contractors Act 1995 in the course of conducting the business of a building work contractor. Once again the evidence demonstrated that Mr McLean entered into a contract for work he was not authorised or licensed to perform. He demanded and was paid a deposit of $4,000 in excess of what was allowed under the Regulations. He also received a progress payment of $2,500 for work when no work had been done and it was not a genuine progress payment. Again it was alleged that Mr McLean failed to take out the appropriate policy of insurance.

17. Count 11 alleged that Mr McLean acted improperly in the course of conducting the business of a building work contractor in contravention of s 21(1)(c) of the Building Work Contractors Act 1995. As with some of the previous counts it was again alleged that Mr McLean failed to complete the work that he had contracted with Mrs Arnold to perform.

18. Count 12 alleged that Mr McLean performed some of the work in relation to this contact negligently. The evidence established the allegations in counts 10, 11 and 12.

19. Count 13 related to the Sierb contract. It was alleged that between 1 October 2005 and February 2006 Mr McLean acted improperly in the course of conducting the business of a building work contractor in contravention of s 21(1)(c) of the Building Work Contractors Act 1995. The evidence demonstrated that Mr McLean entered into a contract for the construction of a new pergola and that he was paid a deposit by Mr and Mrs Sierb. Apart from delivering some materials no work was performed. A refund cheque given to Mr and Mrs Sierb was dishonoured. The evidence proved the allegations.

20. The hearing of the matter after the evidence was tendered by Ms Costi, was adjourned to 24 November 2006. On that date it was again adjourned to 4 December 2006. On neither occasion did Mr McLean attend despite attempts by both the Registry and the Commissioner to contact Mr McLean. Accordingly the evidence was finalised.

21. Ms Costi tendered as part of the evidence material from Mr McLean that had been sent to the Commissioner. This demonstrated that it appears that Mr McLean was suffering from anxiety and depression and in fact was under the treatment of a psychiatrist, Dr Marmanidis. We have taken that into account when coming to our conclusions regarding the orders sought.

22. Due to Mr McLean’s absence there was no evidence to counter the evidence submitted by the Commissioner.

    Findings

23. The Court finds, on the material submitted by the Commissioner and tendered before it, that the particulars in the complaint are made out. Accordingly pursuant to s 25(1) of the Building Work Contractors Act 1995 we are satisfied that there is proper cause for taking disciplinary action against Mr McLean. Pursuant to s 25 the Court is empowered to make one or more of the orders there specified.

    Penalty

24. As mentioned earlier Mr McLean was declared bankrupt on 13 February 2006.

25. He had not sought to renew his licence. Pursuant to s 9(c) of the Building Work Contractors Act 1995 Mr McLean is unable to be granted a licence if he had been, during the period of 10 years preceding the application for a licence, an undischarged bankrupt. This means that Mr McLean is disqualified from obtaining a licence for approximately 12 years.

26. The Commissioner therefore did not seek any orders in relation to Mr McLean personally obtaining a licence. The Commissioner however sought an order that he be prohibited from being a director of a company that sought such a licence. The Commissioner thus sought orders pursuant to s 25(f) and (i) namely that Mr McLean be prohibited from being a director of a body corporate that is either a building work contractor or a building consultant.

27. The purpose of disciplinary proceedings is the protection of the public and not punishment for wrong doing[1].

    [1] Craig v The Medical Board of South Australia (2001) 79 SASR 545 at 554.

28. It is important in the interests of the general public to maintain public confidence in the integrity and competency of licensed contractors and workers. Pursuant to s 9 of the Act a licence is only granted to a person if they have sufficient business knowledge and experience and financial resources for the purpose of properly carrying out the business authorised by the licence and that they also be a fit and proper person to be the holder of such a licence. Section 9 also requires that the person who is granted a licence have the qualifications and experience required for the kind of work authorised by the licence.

29. It was submitted by Ms Costi on behalf of the Commissioner that the conduct of Mr McLean occurred over a lengthy period namely about four years from January 2002 until January 2006. Generally there was a failure to comply with the Act, he acted outside the scope of his licence, he did not have contracts in writing, he did not have insurance to cover building work and on occasions he demanded payments otherwise than in accordance with the Act. There was also a complete failure to honour the contractual obligations in relation to the seven consumers mentioned in the complaint.

30. The Court accepts the general thrust of those submissions. Disciplinary action is required and the public must be protected.

    Orders

31. Having considered all of the circumstances established the Court is of the view that the orders sought by the Commissioner should be made. Accordingly the orders of the Court are:

    1.    That Mr McLean be prohibited from being a director of a body corporate that is a building work contractor until further order.

    2.    That Mr McLean be prohibited from being the director of a body corporate that is a building consultant until further order.