Deputy Commissioner for Consumer Affairs v Faraj - [2013] SADC 155

District Court of South Australia
(Civil)
DEPUTY COMMISSIONER FOR CONSUMER AFFAIRS v FARAJ
[2013] SADC 155
Judgment of His Honour Judge Stretton (ex tempore)
15 November 2013
PROFESSIONS AND TRADES - BUILDERS - DISCIPLINARY PROCEEDINGS
The Deputy Commissioner for Consumer Affairs applied for orders disqualifying the defendant from being licenced or registered under the Building Work Contractors Act, on the basis of his activities undertaking unlicenced building work and his conduct while undertaking that work.
The defendant conducted extensive building work whilst never licenced to do so, failed to take out the required insurance, failed to contract in writing as required, undertook building work negligently, and after being convicted in a summary court of regulatory offences concerning such work, continued to advertise and seek further building work.
HELD:
Proper cause exists pursuant to s.25 of the Act to order that the defendant be;
1. Disqualified from being licenced and registered until further order.
2. Prohibited from being employed or otherwise engaged in the business of a building work contractor until further order.
3. Prohibited from being the director of a body corporate that is a building work contractor until further order.
Building Work Contractors Act (SA) 1995 s 25, referred to.
Craig v The Medical Board of South Australia (2001) 79 SASR 545; Carusi v The Police (2002) SASC 240; Commissioner for Consumer Affairs v Sollars (2001) SASC 110; Acting Commissioner for Consumer Affairs v McLean (2011) SADC 154, considered.

DEPUTY COMMISSIONER FOR CONSUMER AFFAIRS v FARAJ
[2013] SADC 155
Introduction

This is an application by the Deputy Commissioner for Consumer Affairs pursuant to the Building Work Contractors Act (“the Act”) for disciplinary orders in relation to Ali Faraj, previously known as Kamal Mousselmani and Kamal Kassem.
It is alleged that he has carried on the business of a building work contractor when he was not authorised to do so by any licence issued pursuant to the Act, that he has carried out building work failing to comply with the requirement that domestic building work contracts be in writing, that he has demanded or required unauthorised payments be made under a domestic building work contract, that he performed building work under a domestic building work contract whilst uninsured, acted improperly or negligently in the course of such work and that he has advertised and held himself out as being entitled to carry on business as a building work contractor without being authorised to do so by placing numerous advertisements even after he was convicted of a range of offences in relation to unlawful building work.
Non appearance
The defendant has not appeared today. I note from the history of the file that he has been informed of today’s date. I notice a history of non-attendance. I note that he has been contacted by the applicant prior to today and has indicated that he won’t be attending because he’s elected to be in Sydney for a family reason. Attempts by court staff to contact him today on his current mobile phone involved that phone ringing out on several occasions. Formal non-appearance has also been proven.
I note from evidence tendered before me that the complaint, the amended complaint and a full brief of evidence containing numerous witness statements has been supplied to the defendant many months ago. I also note that the defendant has admitted in writing the contents of those statements and all the facts alleged in the amended complaint.
In all the circumstances I am satisfied that he is fully aware of today’s hearing and everything being alleged against him by the complainant and that the requirements of natural justice have been satisfied. I also believe that in light of the view I have taken of the evidence foreshadowed in this matter, and in light of the protective nature of this jurisdiction, that it is manifestly in the interests of justice, the public and the protection of the public from the conduct complained of, that the matter proceed immediately.
Previous regulatory prosecution
I note there have been previous proceedings in this matter. The defendant was prosecuted by the applicant in the Magistrates Court for breaches of the Act. The defendant again failed to attend without any real excuse. The defendant was prosecuted in that Court for much of the behaviour that is the subject of evidence before this court. On 7 September 2012 the defendant was convicted by Mr Broderick SM on all counts. He was fined. He was ordered to pay significant compensation to several members of the public that had had the misfortune to retain him to perform building work.
These proceedings
The nature of these proceedings are disciplinary proceedings. They do not of themselves seek to penalise the defendant, although the effect of orders made may be just that. Rather they seek to protect the public from any future conduct that Mr Faraj may otherwise carry out in breach of the Act.
The complainant seeks orders pursuant to s.25 of the Act disqualifying the defendant from holding or obtaining a licence pursuant to the Act, prohibiting him from being employed by anyone holding a licence and conducting building work thereby, and prohibiting him from being a director of any body corporate that might conduct work under the Act, until further order.
The evidence
The complainant called evidence. The complainant tendered the amended complaint together with a document dated 25 July 2013 signed by the defendant admitting the contents of that complaint, and admitting a brief of evidence that had been earlier supplied to the defendant. That brief of evidence was also tendered.
I also received a certificate of record indicating the course of the summary proceedings in the criminal prosecution of the defendant, together with Mr Broderick SM’s judgment in that matter dated 7 September 2012.
Assessment of the application
I turn now to each of the grounds submitted by the complainant in support of their application for the said orders.
Ground one alleges the defendant acted contrary to the Act in that he conducted work as a building work contractor whilst unlicensed. It is alleged that between 9 March 2010 and 16 May 2011 he, at various places in South Australia, carried on unlicensed work.
The evidence establishes that at no relevant time did the defendant hold a licence to act as a building work contractor. It also establishes that in March 2010 the defendant contracted with a Ms Temby and Mr Govvins to perform building work at their units in Warradale for an amount of $7,500 and proceeded to perform at least some of that work. The defendant further contracted with Ms Temby, to undertake another $2,500 worth of work, again in March 2010, and performed that work.
On 13 April 2010 the defendant contracted with a Ms Maswir to perform some $8,000 worth of building work at Hallett Cove, and between April and May 2010 arranged for that work to be done or performed that work himself, ultimately charging some $14,770 which was paid to him by Ms Maswir.
The evidence establishes that in April 2010 the defendant further contracted with Ms Maswir, this time to perform $380,000 worth of building work at her premises at Hallett Cove. That work included substantial renovation of a house and considerable amounts of demolition and construction thereto. Between 1 May and 4 November 2010, the defendant performed some of that work, essentially demolition work, and some $90,000 in progress payments were made. The defendant didn’t complete that work notwithstanding his contractual obligation to do so.
Further, between 1 September and 13 September 2010, the defendant also contracted with a Ms Bu and a Mr Cole to perform building work for them at Rostrevor in the amount of $50,000. That work included general building work, fencing, guttering and the like. From September to November 2010 the defendant performed that work or some of it and was paid $40,000 by Ms Bu and Mr Cole.
The defendant also contracted with a Mr Houllis to perform work at Christies Beach for the sum of $50,000. That work was general building work, and between March and May 2010 work was performed and Mr Houllis ultimately paid the defendant some $70,000 for that building work.
The defendant also contracted to perform further building work on a detached studio owned by Mr Houllis at that same address for the sum of $55,000. Mr Houllis paid the defendant $10,000 in respect of that work.
It is accordingly plain from the evidence that the defendant carried out extensive work purporting to be a licensed building work contractor whilst unlicensed. Accordingly ground 1 is established.
Ground two alleges that the defendant between 1 September 2010 and 4 November 2010, failed to comply with the requirement that domestic building work contracts be in writing, contrary to the Act.
I find that between 1 and 13 September 2010, when the defendant agreed to perform the said work for Ms Bu and Mr Cole, in the sum of $50,000 to their premises at Rostrevor, that contract was not in writing. Accordingly I find ground 2 established.
Ground three alleges that the defendant between 28 February 2010 and 16 May 2010, further failed to comply with the requirement that a domestic building work contract be in writing contrary to the Act. I find that in relation to the work performed for Mr Houllis, the contract made with him was made during the particularised period and was not in writing. That relates to the work performed at Christies Beach previously referred to, for which Mr Houllis paid $70,000. I find ground 3 established.
Ground four alleges that the contract to perform the further work for Mr Houllis on his detached studio for the amount of $50,000 of which $10,000 was paid, was also not in writing as required by the Act. I find those facts established. Accordingly, I find ground 4 established.
Ground five alleges that the defendant demanded or required that progress payments be made between April and May 2010 when such payments were not authorised or justified. I find that in relation to the work that he undertook for Mr Maswir between those times, the defendant demanded $50,000 before work commenced, which such payment did not constitute a genuine progress payment and was not authorised either under the regulations or justified in any other way. Accordingly, I find ground 5 established.
Ground six alleges that in relation to work performed for Ms Bu and Mr Cole, as previously described, the defendant demanded or required an unauthorised payment be made contrary to the Act. I find that a $10,000 deposit which did not constitute a genuine progress payment and was not authorised under the regulations or otherwise justified was demanded by the defendant and, accordingly, ground 6 is established.
Count seven alleges that between 28 February and 2 March, in performing the work previously discussed for Mr Houllis, the defendant required Mr Houllis to pay a $10,000 deposit which did not constitute a genuine progress payment and was not authorised under the regulations or otherwise justified. I find that occurred. Accordingly, ground 7 is established.
Ground eight alleges that the defendant secured a further $10,000 payment from Mr Houllis in respect of the further work on the detached studio performed at Christies Beach and that that payment was unauthorised as it did not constitute a genuine progress payment and was not of a kind authorised under the regulations or otherwise justified. I find that occurred. Accordingly, ground 8 is established.
Ground nine alleges that the defendant conducted building work under a domestic building works contract while there was not in force any policy of insurance as required under the Act. I find that in late April 2010 the defendant entered into the earlier discussed contract with Ms Maswir to perform $380,000 of building work for her at Hallett Cove home, and was paid some $90,000 for that work. Insurance was required pursuant to the Act in relation to that contract, and I find that there was no policy of insurance in place. Accordingly, ground 9 is established.
Ground ten alleges that between 28 February 2011 and 25 March 2011 the defendant acted improperly and negligently in the course of conducting his business.
During that period I find the defendant was carrying on business as a building work contractor although unlicensed.
I find that between 28 February 2011 and 25 March 2011 he agreed to perform building work for Mr Houllis at Christies Beach and arranged for work to be done there pursuant to that agreement and received some $80,000 in respect of that work from Mr Houllis.
I find that the building work was defective, of poor standard, incomplete and required substantial rectification, in at least the following respects.
The construction of the fence was inadequate in terms of its foundations, was not level and was of inadequate standard and quality. The defendant removed arch openings and replaced brickwork, utilising steel lintels that had not been properly primed to prevent rust. He painted existing timber windows without adequate preparation by sanding, filling or other necessary preparation. He tiled the bathroom, the water closet and laundry without proper preparation or waterproofing. The polished floors in the passage were partially tiled without any preparation by sanding or the appropriate application of an adhesive and he utilised inappropriate tiling for tiling in outside areas.
I am satisfied that his conduct in performing that work was plainly negligent and inadequate. Accordingly, ground 10 is established.
I note that subsequent to all of that conduct, the defendant was convicted in the Adelaide Magistrates Court on 11 counts of breaches of the Building Work Contractors Act. In some attempt at brevity I will not repeat the findings of Mr Broderick SM. It is fair to summarise Mr Broderick’s findings by simply quoting the third paragraph of his Honour’s judgment:
Mr Faraj’s activities come within the worst behaviour contemplated by the Act. If this legislation gave the court power to imprison, I would have sentenced Mr Faraj to imprisonment if there were no circumstances put before me to mitigate that penalty for the offences I have found proved.
His conduct, as therein revealed, was I find grossly negligent, outrageous and indeed he carved a swathe of destruction through the lives of the people who were unfortunate enough to retain him to work on their premises.
Notwithstanding that, and Mr Broderick SM’s findings, fines and orders, which were made on 7 September 2012, it seems Mr Faraj continued undeterred to advertise his services as a builder.
This leads to a consideration of grounds 11 and 12.
Ground eleven alleges that between 24 October 2012 and 14 November 2012 the defendant advertised and held himself out as being entitled to carry on business as a building work contractor without being in fact authorised to carry on such business pursuant to the Act.
I find that on about 19 October 2012 the defendant sought to place an advertisement in five separate suburban South Australian newspapers, at a cost of $1792.64 advertising his services as a painter and builder. The advertisements were run between 24 October and 14 November 2012. He was not relevantly authorised. Accordingly, I find ground 11 established.
Ground twelve alleges that between 21 November 2012 and 28 November 2012 the defendant further advertised or held himself out as being entitled to carry on business as a building work contractor without being authorised to do so pursuant to the Act.
The evidence establishes that between about 19 October 2012 and 16 November 2012 the defendant sought to place advertisements in the Messenger newspapers over a period of two weeks and made a payment on 16 November 2012 of $896.32 to do so. That advertisement further advertised his availability to conduct building and painting work. He was not relevantly authorised to do so. The advertisements appeared in the Messenger Newspapers between 21 and 28 November 2012. Accordingly, I find ground 12 established.
What orders are necessary to protect the public?
The complainant seeks orders pursuant to s.25 of the Act. That section provides that on the hearing of a complaint the District Court may, if satisfied on the balance of probabilities that there is proper cause for taking disciplinary action against a person, make a range of orders. Those orders range from simple reprimands to fines, disqualification and prohibition from being employed or otherwise engaged in the business of building work contractor.
I note that s.25(3) provides that if a person has previously been found guilty of an offence and the circumstances of the offence form in whole or in part the subject matter of the complaint, the person is not liable to any further fine under that section in respect of the conduct giving rise to the offence.
I note that there is significant overlap between the conduct alleged before me as a basis for orders to be made pursuant to s.25 and the conduct that was before Magistrate Broderick that led to a range of regulatory convictions, fines and orders for compensation. Accordingly, it is not appropriate to impose any further fine in these proceedings.
The complainant seeks orders pursuant to s.25(1)(d) that the defendant be disqualified from being licensed or registered under the Act. The complainant seeks pursuant to s.25(2) that such disqualification be until further order.
I note the nature of the jurisdiction and the criteria that I should apply. This is plainly a protective jurisdiction, designed to protect the public against the activities of unlicensed builders and contractors. The primary concern, therefore, of this court is the interests of the public and their protection. I appreciate that orders made in a jurisdiction such as this may have a punitive effect on a defendant, but that is plainly not the purpose of these proceedings today or the reason for any orders that may be made.
I have had regard to the authorities referred to me such as Craig v the Medical Board of South Australia (2001) 79 SASR 545, Carusi v The Police (2002) SASC 240 and the Commissioner for Consumer Affairs v Sollars (2001) SASC 110, together with a range of other authorities referred to me per an earlier judgment of this court, Acting Commissioner for Consumer Affairs v McLean (2011) SADC 154. Indeed the High Court authorities relating to fitness to practice in professions are well known and uncontroversial.
I am satisfied on all the evidence before me that the defendant has, at no relevant time, been licensed to conduct any of the building work that he contracted to conduct, that he has had no regard whatsoever for the statutory framework within which builders are required to operate in the State of South Australia, and that far from these being formal omissions, these omissions reflect his cavalier, negligent, almost fraudulent approach to consumers of building services in this State.
That attitude is also reflected in his non-attendance, both before this and other courts, and in the contact that he has had with the unfortunates whose evidence has been tendered in written form before me today.
It is manifestly in the interests of the public that Mr Faraj is immediately banned from holding or obtaining a licence in this State. Such order is necessary for the protection of all consumers of construction, renovation or other building work who may potentially come into professional contact with Mr Faraj.
In my view, the material before me would plainly warrant a permanent ban, however, that’s not been sought by the applicant. The applicant seeks orders that the defendant be disqualified from being licensed or registered under the Act until further order, that he be prohibited from being employed or otherwise engaged in the business of a building work contractor and prohibited from being a director of a body corporate that is a building work contractor. In my view, those orders are manifestly justified and are the minimum required to protect the public.

Accordingly, I am satisfied that I should make orders in those terms. I make the following orders:
ORDERS
1. The defendant is disqualified from being licensed or registered under the Building Work Contractors Act until further order.
2. The defendant is prohibited from being employed or otherwise engaged in the business of a building work contractor until further order.
3. The defendant is prohibited from being the director of a body corporate that is a building work contractor until further order.
I will hear counsel on the subject of costs or any other further or ancillary orders.
ADJOURNED 12.07 P.M.