Furci v Director General, Department of Fair Trading

[2003] NSWADT 53

CITATION:	Furci & Ors -v- Director General, Department of Fair Trading [2003] NSWADT 53
DIVISION:	General Division
PARTIES:	APPLICANT Patrick Jospeh Furci Patrick Joseph Furci & Mary Furci Partnership Haven Homes Pty Ltd RESPONDENT Director General, Department of Fair Trading
FILE NUMBER:	033021; 033022; 033023
HEARING DATES:	31 January 2003
SUBMISSIONS CLOSED:	01/31/2003
DATE OF DECISION:	03/18/2003
BEFORE:	Higgins S - Judicial Member
APPLICATION:	Jurisdiction - Stay of proceedings
MATTER FOR DECISION:	Preliminary matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Home Building Act 1989
CASES CITED:	Pinnacle Homes (Sydney) Pty Limited v Director-General, Department of Fair Trading [2001] NSWADT 222 Dekanic (1982) 6 ALD Williamson v Director-General, Department of Transport [2000] NSWADT 165
REPRESENTATION:	APPLICANT T Liondo, solicitor RESPONDENT F Campora, solicitor
ORDERS:	Orders made on 31 January 2003 ; 1. Application for review by the Patrick Joseph Furci and Mary Furci partnership (File No. 033022) is dismissed - The Tribunal has no jurisdiction to hear the application; 2. Application of Patrick Joseph Furci (File No. 033021) for a stay be granted on the condition that the applicant does not engage in any conduct in respect of entering into a contract for the purpose of undertaking residential building work under the Home Building Act 1989; 3. Application of Home View Homes Pty Ltd (File No. 033023) for a stay be granted subject to:; a) the applicant providing the respondent with proof of its current insurance cover under the Home Building Act 1989 and the respondent advising the applicant that it is satisfied that the cover complies with the requirements of the Act;; AND if the above is satisfied, the stay is granted subject to the following condition; b) the applicant is restricted to entering into one contract at a time in respect of the one dwelling.

1 On 31 January 2003, the Tribunal had before it three applications for an urgent stay arising from a decision by the Director-General, Department of Fair Trading (“the Director-General”) to cancel the contractor licence of the respective applicants. Prior to the cancellation of their licences, the applicants, Patrick Furci, the Patrick and Mary Furci partnership (“the partnership”) and Haven View Homes Pty Ltd (“the company”), were engaged in the residential building business pursuant to a contractor licence that had been issued under the Home Building Act 1989 (“HB Act”).

2 The contractor licences of Patrick Furci and the company were cancelled as of 28 November 2002 on the grounds of 2 complaints received by the Director-General. These complaints alleged numerous areas of defective work by Patrick Furci and the company as well as the company having contracted to undertake residential building work without the required home warranty insurance.

3 The contractor licence of the partnership was cancelled on 8 January 2003, as a result of the partnership having failed to notify the Director-General, within the required period, of its new Nominated Supervisor.

4 On 31 January 2003, at the conclusion of the hearing of the three applications for an urgent stay the Tribunal made orders as set out in the final paragraph of these reasons for decision. These orders included the granting of a stay, subject to conditions, of the Director-General’s decision to cancel the contractor licence of Patrick Furci and the company. The other order that was made was that the Tribunal had no jurisdiction to hear the partnership’s application for review. Accordingly, this application was dismissed.

5 On 31 January 2003, the Tribunal also, by consent, made orders in respect of the hearing of the substantive matters in the remaining applications. These orders included an order that the matter be listed for hearing on 7 April 2003 at 10 am.

6 Following the hearing of the urgent stay applications, on 10 February 2003, an application was made requesting the Tribunal to provide written reasons for its decision in respect of the application by the partnership. As all three matters were heard together, the Tribunal is providing written reasons for all the matters.

RELEVANT LAW
a) Jurisdiction

7 Conferral of jurisdiction on the Tribunal to review a reviewable decision is set out in s.38 of the Administrative Decisions Tribunal Act, 1997(“the ADT Act”). That section provides, so far as is relevant, as follows:

“38(1) Conferral of review jurisdiction:
The Tribunal has jurisdiction under an enactment to review a decision (or a class of decisions) if the enactment
provides that applications may be made to it for a review of any such decision (or class of decisions) made by an
administrator:
(a) in the exercise of functions conferred or imposed by or under the enactment, or
(b) in the exercise of any other functions of the administrator and identified by the enactment.”

8 Section 5 of the ADT Act defines the term “enactment” to mean in relation to a “reviewable decision” an Act (other than the ADT Act) or a statutory rule (other than a statutory rule made under the ADT Act).

9 Part 4A of the Home Building Act 1989 (“HB Act”) sets out what decisions made pursuant to that Act are reviewable by the Tribunal. So far as is relevant, s. 83B of the HB Act provides as follows:

“ 83B Reviews by Tribunal
(1) An applicant for the issue or alteration of an authority aggrieved by any decision of the Director-General relating to the application may apply to the Tribunal for a review of that decision.
(2) The holder of an authority aggrieved by any decision of the Director-General to alter an authority or to cancel a provisional authority may apply to the Tribunal for a review of the decision.
(2A)The holder of a licence aggrieved by a decision of the Director-General to suspend the licence under section
22A may apply to the Tribunal for a review of the decision.
(3) A person aggrieved by any determination or order made by the Director-General under Part 4 may apply to the Tribunal for a review of the determination or order.
(4) ….”
(emphasis added)

10 Section 83A of the HB Act defines the term “authority” for the purposes of s. 83B. This definition includes a licence.

11 Section 22 of the HB Act, which is contained in Part 3 of that Act, provides, so far as is relevant as follows:

“22 Cancellation of contractor licences
(1) The Director-General must , subject to the regulations, cancel a contractor licence that authorises its holder to
contract to do residential building work or specialist work, or both (whether or not it also authorises the holder to
contract to supply kit homes for construction by another person) if:
(a) a period of 30 days (or any longer period that has been agreed on between the holder of the contractor licence and the Director-General) expires during which there has not been a nominated supervisor for the contractor licence, or …”
(emphasis added)

12 The Tribunal’s powers to grant a stay are set out in s.60 of the Administrative Decisions Tribunal Act, 1997 (“ADT Act”) in the following terms:

“s.60(1) Subject to this section, an application to the Tribunal for a review of a reviewable decision does not
affect the operation of the decision under review or prevent the taking of action to implement that decision.

(2) On the application of any party to proceedings for an application for a review of a reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of a determination of the application .
(3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account:

(a) the interest of ay person who may be affected by the determination of the application, and
(b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and
(c) the public interest.

(4) …”
(emphasis added).

13 No oral evidence was given in this matter. The only material before the Tribunal was the application of each applicant (attached to each application was a copy of the Director-General’s notice of decision to cancel the applicant’s licence), the Director-General’s statement of reasons and 2 letters from the Director-General, dated 20 December 2002 and 8 January 2003 respectively, concerning the partnership licence. On the basis of this material and submissions made by Mr Liondo, on behalf of the applicants, which were not objected to by Mr Campora who appeared on behalf of the respondent, the Tribunal found:

(a) Patrick Furci has been the holder of a contractor licence since September 1991;

(b) The partnership has been the holder of a contractor licence since September 1994. The partnership traded under the registered business name of Haven View Homes. The partnership has at all times been the holder of the requisite Home Warranty insurance when contracting to do residential building work;

(c) The company has been the holder of a contractor licence since December 1998. The directors and shareholders of the company are Patrick and Mary Furci. The company has been informed that it is eligible for Home Warranty insurance;

(d) Patrick and Mary Furci have 4 children. Since 1991 Patrick Furci has provided for his family through his and his wife’s business activities of residential home building. Patrick Furci has been able to engage in these activities as he was the holder of the requisite contractor licence under the HB Act;

(e) On 20 August 2002, the Director-General issued notices to show cause why action should not be taken against Patrick Furci and the company following 2 complaints that had been received by the Department. Patrick Furci responded to the notices to show cause on 17 September 2002.

(f) On 19 November 2002, the Director-General gave notice of his decision to cancel the contractor licence of Patrick Furci and the company. The notice addressed to Patrick Furci incorrectly stated his licence number. Instead it stated the licence number of the partnership. The notice to the company also contained the incorrect licence number of the company. In this case reference was made to Patrick Furci’s licence number.

(g) The notices that were issued on 19 November 2002 each stated that the respective licence was cancelled as a result of the Director-General being satisfied that Patrick Furci had engaged in improper conduct in his capacity as a contract licence holder and in his capacity as an officer of the company. The notices also stated that the cancellation was to be effective from 28 November 2002.

(h) The grounds on which the Director-General had made the abovementioned decision related to disputes arising from 2 contracts entered into by the company in 1999 for the construction of two residential premises. Those disputes, in so far as they related to insurance claims, had been settled and the remaining dispute involved a sum of approximately $10,000;

(i) On 22 December 2002, the Director-General wrote to Patrick and Mary Furci advising them that as a result of Patrick Furci’s contractor licence having been cancelled on 5 December 2002, he could no longer be the nominated qualified supervisor of the partnership contractor licence. In the letter, the Director-General also advised that a failure to nominate a supervisor by 5 January 2003 would lead to an automatic cancellation of the partnership’s contractor licence;

(j) Patrick and Mary Furci did not respond to the Director-General’s letter of 22 December 2002.

(k) On 8 January 2003, the Director-General again wrote to Patrick and Mary Furci and advised them that the partnership contractor licence had been cancelled pursuant to s. 22(1)(a) of the HB Act;

APPLICANT’S SUBMISSIONS

14 Mr Liondo, on behalf of the applicant, in respect of the Tribunal’s jurisdiction to hear the application by the partnership submitted that the initial notice issued by the Director-General to Patrick Furci was confusing in that it contained a reference to the partnership’s contractor licence. This he submitted led him to believe that the partnership licence was cancelled under the disciplinary provisions of the HB Act.

15 In respect of the stay applications, Mr Liondo submitted that a stay should be granted as the effect of the cancellations are Patrick Furci is prevented from engaging in any of his business until after the Tribunal has made its determination in respect of the applications. If successful in his applications he and his business will be deprived of irreparable loss. He also submitted that the matters, which gave rise to the cancellations were isolated incidents that occurred in 1999 and had now largely been settled.

RESPONDENT’S SUBMISSIONS

16 Ms Campora, on behalf of the Director-General, submitted that although the notices of cancellation of Patrick Furci’s and the company’s contractor referred to licence numbers of person other than those to whom they were addresses, this did not make them notices of cancellation in respect of these licence numbers. She went on to submit that the content of the notices and the statement of reasons that accompanied them could not have led to any confusion about what licence had been cancelled and what had not been. Ms Campora went on to submit that a decision made by the Director-General under s. 22(1)(a) of the HB Act was not a decision that came within the terms of s. 83B of that Act. Accordingly, by virtue of s.38 of the ADT Act, the Tribunal had no jurisdiction to hear the application.

17 In respect of the stay applications Ms Campora submitted that the Tribunal did not have before it any evidence of business loss. She also submitted that the allegations against Patrick Furci and the company were serious. In particular, the failure of the company to have the requisite Home Warranty insurance. Such insurance cover is a pre-requisite to a licence holder contracting to do residential building work. However, she conceded that if the Tribunal was minded to grant a stay that the Director-General would seek the imposition of conditions so that he can be satisfied that appropriate insurance cover has been taken out by the company as well as being able to monitor any contract work that it undertook. Similarly, a condition would be sought on Patrick Furci’s licence to prevent him from contracting to do residential building work.

REASONING AND DECISION
a) Jurisdiction – Application by the Partnership

18 From the material before the Tribunal there can be no question that the Director-General’s decision to cancel the partnership contractor licence is that, which is reflected in his letter of 8 January 2003. While the notices of cancellation that were issued by the Director-General on 19 November 2002 contained licence numbers of persons other than to whom the notice was addressed, the Tribunal accepts that this was an administrative or typographical error. The Tribunal also accepts that such an error may confuse the recipient of the notice and the Department must take care that the correct licence number is referred to in all notices. In this case, it is difficult to accept that such confusion arose having regard to the circumstances, which preceded the issue of the notices, the other contents of the notices and the fact that they were accompanied by a statement of reasons, which specifically made reference to the cancellation of the contractor licence of the company and Patrick Furci.

19 However, the real question is whether the notices that were issued on 19 November 2002, were notices of a decision by the Director-General to cancel the partnership licence. For the reasons stated above, in the opinion of the Tribunal, the notice addressed to Patrick Furci did not, despite the error contained on them, evidence a decision by the Director-General to cancel the partnership licence.

20 As mentioned above, the Director-General cancelled the partnership licence pursuant to s. 22(1)(a) of the HB Act. In order for the Tribunal to have jurisdiction to review that decision, there must be a specific provision in the HB Act which gives any person aggrieved by a decision made pursuant to this particular paragraph the right to make an application to the Tribunal to review that decision (s. 38 ADT Act).

21 In this case, the relevant provisions are those contained in s. 83B of the HB Act. Sub-sections 83B (2) and (3) are the only provisions that make reference to a decision to “cancel” an authority or a licence. Sub-section 83(2) only applies to decisions to cancel a “provisional authority” (including a provisional licence), which is not applicable in this case. Sub-section 83B(3) only applies to decisions made under Part 4 of the HB Act. That Part contains provisions in respect of disciplinary actions that the Director-General can take against authority holders in respect of improper conduct.

22 As mentioned above, a decision made pursuant to s. 22(1)(a) of the HB Act is a decision made under Part 3 of the Act. It is not a decision made under Part 4.

23 Accordingly, s. 83B of the HB Act does not make any provision for a decision made pursuant to s. 22(1)(a) of that Act to be a reviewable decision. Having regard to the mandatory grounds on which the decision is made under s. 22(1)(a) of the HB Act it is understandable why the decision is not a reviewable decision.

24 For these reasons, the Tribunal finds that it has no jurisdiction to hear the application for a review of the Director-General’s decision to cancel the partnership licence. However, it notes that the decision to cancel the partnership licence was as a result of the decision to cancel Patrick Furci’s licence on 19 November 2002. That decision is a reviewable decision as it was made under Part 4 of the HB Act and Patrick Furci’s application to review that decision has been lodged with the Tribunal. For the reasons stated below, the Tribunal ordered that this decision be stayed to 7 April 2003 when the matter is set down for hearing. While the consequences of having made such an order, in so far as it relates to the decision to cancel the partnership licence, is not a matter for the Tribunal to decide but it may be a matter that can be raised elsewhere.

b) Stay Application

25 Previous decisions of the Tribunal have set out the overall effect of s.60 and the process that is to be gone through in determining whether or not a stay should be granted. In Pinnacle Homes (Sydney) Pty Limited v Director-General, Department of Fair Trading [2001] NSWADT 222 at [4] the President stated as follows:

“The cases that were cited, including Dekanic (1982) 6 ALD, do indicate that the process to be gone through is first to
address the criteria in s.-s.(2) and then to go on and address the criteria set out in s.-s.(3). The Tribunal to date has tended
to take the view that where a licence holder is operating under a licence, it may be appropriate for the Tribunal to make
orders staying any decision that might prevent the licence holder from continuing in business so as to secure the
effectiveness of the determination of the application for review but that is not really the end of the matter. It is still
necessary then to go on and consider the other criteria”.

26 In Williamson v Director-General, Department of Transport [2000] NSWADT 165 at [12], Judicial Member, S. Rice stated the following in respect of the overall effect of s.60:

“The Tribunal’s power is limited to making orders ‘appropriate to secure the effectiveness of the determination of the
application’. Although in considering whether to order a stay the Tribunal must take account of the interests of affected
people, submissions by the administrator, and the public interest, the power to order a stay at all does not arise unless the

Tribunal considers a stay is ‘appropriate to secure the effectiveness of the determination of the application’”.

27 Judicial Member S. Rice went on to state (at [15]) the following in respect of the meaning of an “effective” determination:

“A stay will guard against situations where the Tribunal sets aside the decision under review, only to find that while
waiting for the decision the Applicant has, because of the effect of the original decision, ceased trading or is unable to
restart operations. In such circumstances the Tribunal’s decision would, in the terms of s.60, not be an effective one”.

28 At [17] Judicial Member S. Rice stated:

“As well, a financial determination will not be effective if but for a stay, the applicant would be likely to suffer ‘irreparable
loss’”.

29 Having regard to the material before it, the Tribunal is of the opinion that the threshold test of which it must be satisfied, as set out in s.60(2) of the ADT Act, has been established. That is, at the time of hearing the application of Patrick Furci and the company it can be said that a stay is appropriate to secure the “effectiveness” of the determination of the respective applications. Both applicants had been operating their businesses for some considerable time up until their cancellation on 28 November 2002. Patrick Furci, in particular has been providing for himself and his family through the use of his licence since 1991. The Tribunal also accepts Patrick Furci’s explanation that a stay had not previously been sought as he was fully involved in seeking a resolution to the complaints that had been made.

30 Accordingly, the next step in the process is to consider the submissions made by Ms Campora on behalf of the Director-General and the public interest.

31 Having regard to the requirements of the HB Act for contract licence holders, who are authorised to contract to undertake residential building work, to at all times be insured with the prescribed Home Warranty insurance, the Tribunal agrees with Ms Campora that a failure to have such insurance is a serious matter. In this respect the allegations against Patrick Furci and the company is a serious matter. Similarly, the allegations of defective work are serious matters. However, these are matters which will be dealt with at the substantive hearing and it is not appropriate for the Tribunal to examine them in these stay applications.

32 The Tribunal also accepts Ms Campora’s submissions that it would not be in the public interest to grant a stay unless the applicants can establish that such insurance is in place and that it complies with the requirements of the HB Act.

33 In light of Ms Campora’s concessions that the Director-General would not necessarily oppose a stay if conditions were place on the applicants and for the reasons stated above the Tribunal is of the opinion that it is appropriate to grant the applications sought.

34 Accordingly, in respect of the three matters before it the Tribunal orders:

a) Application for review by the Patrick Joseph Furci and Mary Furci partnership (No 033022) is dismissed – The Tribunal has no jurisdiction to hear the application.

b) Application of Patrick Joseph Furci for a stay be granted on the condition that the applicant does not engage in any conduct in respect of entering into a contract for the purpose of undertaking residential building work under the Home Building Act 1989.

c) Application of Home View Homes Pty Ltd for a stay be granted subject to:

i. the applicant providing the respondent with proof of its current insurance cover under the Home Building Act 1989 and the respondent advising the applicant that it is satisfied that the cover complies with the requirements of the Act;

AND if the above is satisfied, the stay is granted subject to the following condition

ii. the applicant is restricted to entering into one contract at a time in respect of the one dwelling.