Griggs v Commissioner for Consumer Affairs - [2007] SADC 63

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
In the Matter of THE BUILDING WORK CONTRACTORS ACT, 1995
GRIGGS v COMMISSIONER FOR CONSUMER AFFAIRS
[2007] SADC 63
Judgment of His Honour Judge Beazley
1 June 2007
ADMINISTRATIVE LAW
Profession and Trades - Licensing of Particular Trades or Callings - Builders
Appeal against Commissioner's refusal to grant a Building Work Contractor's Licence - Relevance of factual errors in assessment as to whether the appellant is a fit and proper person to be licensed under the Building Work Contractors Act, 1995 - held, appeal allowed
Building Work Contractors Act, 1995 s7, s9(1)(f), s10, referred to.
Commissioner for Consumer Affairs v Griggs [2001] SADC 47; Griggs v Australian Securities Commision Supreme Court Judgment No S5446, discussed.
A Solicitor v Council of the Law Society of N.S.W. (2004) 78 ALJR 310; Sobey v Commercial and Private Agents Board (1979) 22 SASR 70; Commissioner for Consumer Affairs v Sollars (2001) 79 SASR 145; Midwinter v Commissioner for Consumer Affairs [2006] SADC 93; C v Johnson (1967) SASR 279 at 297, considered.

GRIGGS v COMMISSIONER FOR CONSUMER AFFAIRS
[2007] SADC 63
Introduction

David John Griggs (“the appellant”) appeals to this Court pursuant to Section 10 of the Building Work Contractors Act 1995 (“the Act”) against the refusal of the Commissioner for Consumer Affairs (“the Commissioner”) to grant him a building work contractor’s licence.
By application, dated 10 November 2006, the appellant sought such a licence to enable him to undertake certain building work specified by him as follows:
Commercial/Industrial and Residential Building work limited to carpentry and joinery; domestic and light commercial building work up to and including two storeys.
By Notice, dated 1 February 2007, the Commissioner informed the appellant that his application for a licence had been refused as he had failed to meet the requirements of Section 9 of the Act. The Commissioner, however, confirmed that the appellant was entitled to maintain his current building work supervisor’s registration.
Notice of Appeal
By Notice of Appeal, dated 7 March 2007, the appellant appealed, out of time, against the refusal to grant a contractor’s licence. On 28 March 2007, a Judge of this Court extended the time in which the appellant could institute an appeal to 7 March 2007 nunc pro tunc.
Commissioner’s Reasons for Refusal
By the time of the hearing of the appeal, the Commissioner’s reasons for the refusal of the appellant’s application had been somewhat amplified beyond that which he had been provided in his Notice to the appellant.
Notice - 2 February 2007
This document provided as follows:
Reasons for Decision
I refer to the application by David Griggs for a contractor’s licence under the Building Work Contractors Act 1995 for work that may be contracted for under the authority of the licence for “residential building work not exceeding two storeys, light commercial up to two storeys and carpentry and joinery”.
Section 9 of the Act provides:
Entitlement to be licensed
9. (1) A natural person is entitled to be granted a licence if the person .....
(f) is a fit and proper person to be the holder of a licence.
On the question of fitness and propriety, Mr Griggs’s National Police Clearance Certificate indicates that he has offences from August 1995. Specific concern is raised with the following offence:
·On 14 August 1995 the applicant was found guilty of “Failing to take steps to ensure proper accounts kept (3), Fail to deliver up company books (4), Fail to comply with requirement - information/investigation (4)”. This resulted in fines totalling $5,000.
After a comprehensive assessment of all information provided it has been determined that by virtue of Section 9(1)(f), the applicant is not entitled to be granted a licence.
The application for a contractor’s licence is refused.
As I have indicated, on the appeal the Commissioner sought to adduce further evidence by affidavit of the Commissioner’s delegate, which affidavit expanded upon the reasons for the refusal.
The Appeal
Mr Patel appeared as counsel for the appellant. Ms Geyer appeared as counsel for the Commissioner.
With the consent of both parties, I received additional evidence by way of affidavits of Tony John Charles Mangion, sworn 30 March 2007, and of the appellant, sworn 17 April 2007. Further, I permitted counsel for the Commissioner to cross‑examine the appellant on one aspect of his affidavit, namely his knowledge of the financial position of S&G Holding Pty Ltd, a company in respect of which he had become a director on 18 August 2005.
Additional Reasons for Refusal
Mr Mangion is the duly authorised delegate of the Commissioner for the purpose of determining licence applications. The appellant’s application had been referred by him to a licensing officer (Ms Hobart). She had recommended refusal of the licence on the basis that the appellant was not a fit and proper person to be licensed.
Mr Mangion, in referring to the written reasons for the refusal in the Notice, dated 2 February 2007, deposed in paragraph 22 of his affidavit:
I am able to state that the reasons for decision [document] was not complete. The document did not list the prior disciplinary action against the appellant as having been of specific concern in the exercise of the [discretion]. These considerations were the most relevant in the exercise of my discretion as the Commissioner’s delegate. In making the decision to refuse the applicant’s licence, I also took into account all of the other factors listed in Ms Hobart’s recommendation. I did not have regard to any matters not listed in that recommendation.
Errors in the Notice of 2 February 2007; and the Recommendation of Licensing Officer of 24 January 2007
1.The notice of refusal made reference to various convictions related to the failure to keep records, and to fines totalling $5,000. In her recommendation, Ms Hobart expressed the view that those convictions related to work performed in the building industry.
In fact, the fines had been the subject of an appeal to the Supreme Court. Justice Nyland, in Reasons delivered in the matter of Griggs v Australian Securities Commission (unreported judgment No s5446, delivered 22 November 1995), had reduced those fines from $5,000 to a total of $2,000. The fines related to the failure to provide records and assistance to the liquidator of property developers, Ayelands Pty Ltd, Crestwood Homes Pty Ltd, Lawinna Pty Ltd and Middleton Heights Pty Ltd. The fines, contrary to the matters considered in the recommendation of Ms Hobart, were not merely reduced, but had no connection to the performance of work in the building industry.
2.The recommendation made reference to the appellant being made bankrupt in 2003. In fact, he became bankrupt on his own petition on 11 January 1993, and was discharged on 11 April 1996.
3.The recommendation referred to “court documents” which prohibited the appellant from being a director of a body corporate that is a building work contractor.
This third item relates to a finding of this Court in the matter of a complaint issued by the respondent. In Commissioner for Consumer Affairs v Griggs [2001] SADC 47, the Court concluded that there was proper cause for taking disciplinary action against the appellant. On 15 May 2001, the Court ordered that the appellant’s building work contractor’s licence be cancelled and that he be prohibited from being a director of a body corporate that is a building work contractor. The Court had, with respect, quite correctly left open the period of prohibition as a director.
In C v Johnson (1967) SASR 279 at 297, when referring to a defaulting Land Agent, Bray C.J. said:
It must be remembered that the disciplinary action of Tribunals of this nature is not intended as a punishment to the defendant, but as a protection to the public by ensuring that proper standards of professional or occupational conduct are maintained, and that persons who fall short of them are, in appropriate cases prevented permanently or temporarily from continuing to deal with the public.
In this case the Court did not intend to convey that the appellant ought permanently be disqualified from being a Director. The Court would have had in mind the 10 year period in section 9(1) of the Act.
Background
The appellant, who is now aged 39 years, had held a building work contractor’s licence between 7 July 1989 and July 1994. He had been declared bankrupt on 11 January 1993 because of a guarantee executed by him with respect to debts incurred by his father in the purchase of a shopping centre. On 21 July 1994, by order of the Commercial Tribunal, the appellant’s licence was restricted in consequence of his bankruptcy by various conditions, including that his contracts not exceed $10,000.
In the month of October 1995, a company of which he was a director had contracted to undertake building work. When that company was placed into liquidation in August 1996, the appellant completed one dwelling in breach of the conditions of his licence for the payment of $22,530. He had also failed to have a policy of building indemnity insurance in place. No loss was suffered by the contracting party as the work was competently performed and completed on budget. Similarly, between July 1997 and August 1998, the appellant had undertaken work in breach of the conditions of his licence.
There is no doubt that the Court regarded these breaches as very serious, leading ultimately to the order made for the cancellation of his licence, in 2001.
It must be said that there has never been any suggestion that the appellant’s building work has been defective. It is clear that he is a highly competent builder. He has been registered as a building supervisor under the Act. He is married with three children. Since 1995 he has managed his financial affairs, and kept proper records apparently without blemish.
Submissions of Counsel
Mr Patel, for the appellant, submitted that the sole ground for the Commissioner’s refusal was that the appellant was not a fit and proper person under Section 9(1)(f) of the Act. He contrasted Section 9(1)(f) of the Act with predecessor legislation.
He submitted that Parliament had separately expressly provided for bankruptcy in Section 9(1)(c), and for the directors of failed companies in Section 9(1)(d).
He submitted that, as was the case here, those events had occurred more than 10 years previously, so that they ought not be taken into account in the assessment of the appellant’s fitness and propriety. I do not accept that submission. In my opinion, properly construed, an applicant who does not meet the criteria in Section 9(1)(c) or (d) cannot be licensed. If, however, there had been such conduct prior to the 10 year period, this conduct can still be taken into account in the assessment of the appellant’s fitness and propriety. A significant difference between a building work contractor’s licence under Section 9 on the one hand, and mere registration as a building work supervisor under Section 15 on the other, is that the former only is permitted to contract with the public. The financial record of the applicant is a crucial factor in an application for a licence whensoever those financial difficulties may have arisen.
He further submitted that it had been nearly eight years since the appellant had undertaken building work in breach of the conditions of his licence. He had been 30 years of age at the time, and in financial difficulties simply in consequence of guaranteeing his father’s debts. At all times his building work has been of the highest quality. He had learnt his lesson and was now a far more mature person. His disqualification had to come to an end at some time, and now was the appropriate time.
Ms Geyer properly conceded that factual errors were disclosed in the licensing officer’s memorandum and that the appellant had not been given an opportunity to explain the background to his convictions and his prior disciplinary action.
I had permitted Ms Geyer to cross‑examine the appellant about his current directorship of the company, S&G Holding Pty Ltd. Ms Geyer had suggested to the appellant that he had not learnt from his experiences in 1996, by becoming involved in a company without checking its financial history. I am satisfied that Mr Griggs indeed took all necessary investigations before becoming a director and shareholder of that company on 18 August 2005. The company otherwise had no relevance to the application as it was a property investment corporate vehicle, which was commercially valuable.
Ms Geyer referred to Section 42E of the District Court Act, and submitted that, notwithstanding the concessions properly made by her, the Commissioner’s decision was correct and that in any event, cogent reasons do not exist to depart from that decision.
Fit and Proper to be Licensed
In Section 9(1)(f) the question is whether the appellant is presently fit and proper to be licensed. See A Solicitor v Law Society of N.S.W. (2004) 78 ALJR 310.
In Hughes and Vales Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127 at 156 the High Court said:
The expression ‘fit and proper’ is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. But their very purpose is to give the widest scope for judgment and indeed for rejection. ‘Fit’ (or ‘idoneus’) with respect to an office is said to involve three things, honesty, knowledge and ability.
In Commissioner for Consumer Affairs v Sollars (2001) 79 SASR 145 at 147, Doyle CJ said:
In my opinion the scheme of the Act is relevantly to protect the public by regulating who may engage in the activities for which a licence is required. The focus is on the protection of the public by requiring applicants to meet criteria directed to their qualifications, experience and fitness for the occupation.
In a much cited passage of his Reasons in Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 at 74-75, Walters J said:
Any member of the public engaging the services of ..... a person holding a licence ..... is entitled to expect that person to be of good standing in the community and to possess sufficient skills, experience and proficiency to enable him to discharge the functions which he is licensed to perform. Hence, it seems to me that the object of the legislation is twofold: first, to control, regulate and supervise the conduct of those who engage in the sort of work falling within the ambit of the Act, and secondly, to ensure that those to whom licences are granted are persons of probity who have the capacity to carry out the duties and responsibilities with which licences invest them ..... I cannot imagine anything which is more germane to the question whether a person is a fit and proper person than the matter of his record of previous offences. Any previous breaches of the law, and any propensity towards offending against the law must, in my view, be regarded as of crucial importance ..... [However] When a considerable period of time has elapsed from now, past facts might be viewed in the light of the lapse of time, and weight might then be properly given to his subsequent good behaviour.
In Midwinter v Commissioner for Consumer Affairs [2006] SADC 93, His Honour Judge Lovell extracted some six principles from the various authorities, which ought be considered in the light of the matters specified in Section 42E of the District Court Act. These are:-
1. Direct its enquiry to the situation that stands at the time of the application.
2.Consider the activities in which the applicant is or will be engaged and the ends to be served by those activities. What is relevant for consideration depends on the statutory context and the qualifications directly relevant to the particular vocation.
3.Take into account relevant past events including previous experience in the area under consideration and the personal antecedents of the applicant.
4.If the applicant has been involved in breaches of the law and/or has a propensity towards offending against the law such matters must be regarded as of importance.
5.The nature and seriousness of previous convictions will necessarily vary in their importance bearing in mind the significance that those convictions must necessarily have in relation to the type of work envisaged by the particular licence sought. In some cases, previous criminal convictions may be crucial to the decision process.
6.Where an applicant applies for a licence having never before performed a particular class of work, a licensing authority would be justified in erring on the side of caution, thus requiring an applicant to demonstrate a significant period of good behaviour following relevant convictions before acceding to an application for a licence.
I have taken account of those matters in determining the merits of this appeal.
Discussion
In considering whether the appellant is presently fit and proper to be licensed, of great significance is the fact that the conduct of which the Commissioner complains occurred between eight and 14 years ago.
The convictions of the appellant which were crucial to the recommendation of the licensing officer did not relate to building work and the licensing officer did not appreciate that the penalties had been reduced on appeal.
There were of course various factors militating towards the refusal of the application. These included the financial mess in which the applicant found both himself and his companies in 1993 and 1995.
The fact that the appellant had seen fit to ignore the conditions of his licence in 1997 and 1998 is, of course, a most serious matter, and was regarded seriously by this Court in 2001 when the appellant’s licence was cancelled. Balanced against these adverse considerations, however, are the lapse of time, the appellant’s undoubted building skills, the fact that he was previously licensed between 1989 and July 1994, and on a restricted basis thereafter until 2001; and the appellant’s impeccable record in the industry since 1998. In addition, the appellant’s excellent present financial position is to be contrasted with that which gave rise to his bankruptcy in 1993.
The Commissioner had acknowledged that the appellant is a competent builder and that there have been no consumer complaints about the quality of his work. He has already satisfied the Commissioner that he should be registered as a building work supervisor, albeit that under Section 16 of the Act, an entitlement to be registered is not dependent on fitness and propriety.
Conclusion
In this case, the appellant was denied procedural fairness. In my opinion, the discretion of the Commissioner’s delegate miscarried. In consequence of the factual errors in the recommendation of the licensing officer and the failure to give the appellant the opportunity to make submissions to him about both the prior disciplinary action in 2001 and the convictions in 1995, the decision of the Commissioner cannot stand.
In my opinion, however, this is not a matter which should simply be referred back to the Commissioner for reconsideration in light of the additional evidence in the affidavits tendered before me.
I am satisfied in light of the eight year period since the breaches of the conditions of his licence in 1997 and 1998, and the fact that there has never been a complaint about the quality of his building work, that the appellant is now a fit and proper person to be licensed pursuant to Section 9(1)(f) of the Act.

In my opinion, a Building Work Contractor’s Licence enabling the appellant to undertake commercial/industrial and residential building work limited to carpentry and joinery; and domestic and light commercial building work not exceeding two storeys should be issued to the appellant upon such conditions as the Commissioner deems appropriate pursuant to Section 7 of the Act.
The appeal is therefore allowed. I will hear the parties as to the formal orders which should be made in the light of these reasons.