Macerola v Commissioner for Fair Trading, NSW Office of Fair Trading - [2007] NSWADT 144

No judgment structure available for this case.

CITATION: Macerola v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 144

DIVISION: General Division

PARTIES: APPLICANT
Vincenzo Fortunato Macerola
RESPONDENT
Commissioner of Fair Trading, NSW Office of Fair Trading

FILE NUMBER: 063274

HEARING DATES: 7 February 2007

SUBMISSIONS CLOSED: 7 March 2007

DATE OF DECISION:
2 July 2007

BEFORE: Pearson L - Judicial Member

CATCHWORDS: Home Builder - improper conduct - Home Building Act - home builder - improper conduct

MATTER FOR DECISION: Principal matter

LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Home Building Act 1989
Home Building Regulation 2004

CASES CITED: Director-General, Department of Fair Trading v Cohen [2000] NSWFTTT 3
Pilipczyk & Anor v Commissioner for Fair Trading [2007] NSWADT 85
Woolley v Commissioner for Fai

REPRESENTATION:
APPLICANT
T Boyle, solicitor
RESPONDENT
W Maynard, solicitor

ORDERS: The decision under review is set aside, and in substitution for that decision the applicant is to be issued with a caution in respect of improper conduct as nominated supervisor in relation to work carried out by Ozkote Pty Ltd.

REASONS FOR DECISION

1 The applicant seeks review of a decision of the respondent to take disciplinary action under s 62(c) of the Home Building Act 1989 (the HB Act).

2 On 4 July 2002 the applicant was issued with a contractor licence under s 20 of the HB Act, and that licence was endorsed as an endorsed contractor licence under s 26 of the HB Act. The contractor licence was valid until 4 July 2006. On 31 July 2002 Ozkote Pty Ltd was issued with a contractor licence under s 20 of the HB Act, authorising Ozkote Pty Ltd to do residential building work within the category of “general concreting”. The applicant was registered as nominated supervisor for Ozkote Pty Ltd from 11 July 2002, and two other people were registered as nominated supervisors from 29 July 2004.

3 On 18 March 2005 a delegate of the respondent served notice on the applicant to show cause why disciplinary action should not be taken. The notice specified as the grounds for disciplinary action that as the nominated supervisor for Ozkote Pty Ltd, the applicant was guilty of improper conduct under s 53(1)(b) of the HB Act, in that while the holder of an endorsed contractor licence who had control over the carrying out of residential building work, there was as breach of statutory warranty under s 18B(a) of the HB Act to perform work in a proper and workmanlike manner. Eight matters were referred to, concerning work carried out in Carlingford in September 2003, Glendale in August 2003, Westleigh in August 2003, Winston Hills in March 2003, Wallsend in June 2003, Saratoga in May 2003, Umina Beach in May 2003, and Charlestown in February 2003.

4 On 28 April 2005 the applicant’s then solicitor made written submissions on his behalf. On 8 November 2005 a delegate of the respondent decided that the grounds for taking disciplinary action had been established, and required the applicant to pay to the respondent within the period of 28 days the sum of $20,000, being the total of $2,500 for each of eight acts of improper conduct.

5 The applicant requested internal review. On 20 June 2006 the Director, Operations and Governance, Home Building Service of the Office of Fair Trading, affirmed the decision of the delegate that the applicant was guilty of improper conduct under s53(1)(b) of the HB Act, and affirmed the decision to take disciplinary action by requiring the applicant to pay as penalty an aggregate amount of $20,000.

6 The applicant applied to the tribunal for review of the decision on 19 July 2006. A hearing was initially scheduled for 31 October 2006. That date was vacated at the request of the applicant, who requested further time to obtain legal representation, and with the consent of the respondent. The hearing was rescheduled for 7 February 2007, and the applicant gave oral evidence. Further submissions were filed after the hearing.

Legislation

7 Section 4 of the HB Act provides that it is an offence to contract to carry out building work unless a person is the holder of a contractor licence. Div 1 Part 3 of the HB Act sets out provisions for the issuing, suspension and cancellation of contractor licences.

8 Under cl 26(1)(a) of the Home Building Regulation 2004 (the HB Regulation), before a contractor licence is issued the Director-General must be satisfied that the applicant has, or proposes to have, “such numbers of nominated supervisors for the contractor licence as the Director-General considers are needed to ensure that all work for which the contractor licence is required will be done or supervised by qualified individuals”.

9 A “nominated supervisor” is defined in s3 of the HB Act to mean an individual:

(b) who is for the time being registered in accordance with the regulations for the purpose of supervising the doing of residential building work or specialist work.

10 Under s26 of the HB Act, an endorsed contractor licence is the equivalent of a supervisor certificate. An applicant who applies for an endorsement of a contractor licence to show that it is the equivalent of a supervisor certificate must, among other things, comply with the requirements of cl 28(1): cl.26(1)(b) HB Regulation. Those requirements are:

(1) Before a certificate is issued, the Director-General must be satisfied that the applicant:

(b) has had experience of such a kind and for such a period, as the Director-General considers would enable the applicant to do, or to supervise, the work for which the certificate is required, and

(c) is capable of doing or supervising work for which the certificate is required.

11 Under s120 of the HB Act the Director General is to maintain a register of particulars of contractor licences, and other licences, certificates, and permits. Clause 80 of the HB Regulation requires that the register include, among other things:

(vii) if the holder is the nominated supervisor of the holder of another contractor licence, the name and contractor licence number of that other contractor licence holder, the date of the consent declaration and the date of ceasing to be a nominated supervisor,

12 Section 18B of the HB Act sets out the statutory warranties implied in every contract to do residential building work. The relevant warranty in this matter is that provided in paragraph (a):

18B Warranties as to residential building work

The following warranties by the holder of a contractor licence, or a person required to hold a contractor licence before entering into a contract, are implied in every contract to do residential building work:

(a) a warranty that the work will be performed in a proper and workmanlike manner and in accordance with the plans and specifications set out in the contract,

13 Section 56 of the HB Act sets out the grounds for taking disciplinary action against the holder of a contractor licence. The relevant provision in this matter is paragraph (c):

…

(c) that the holder is guilty of improper conduct,

14 Section 53 specifies what is regarded as improper conduct as a nominated supervisor for the purposes of s56(c):

53 Improper conduct: nominated supervisors

(1) The holder of an endorsed contractor licence or a supervisor certificate who has control over the carrying out of residential building work or specialist work of any kind is guilty of improper conduct if:

(a) the requirements applicable to the work made by or under this Act or any other Act are not complied with, or

(b) a breach of a statutory warranty occurs in the course of doing that work, or

(c) in the case of specialist work, the work is done otherwise than in a good and workmanlike manner or faulty or unsuitable materials are used in the course of doing the work.

(2) The holder of an endorsed contractor licence or a supervisor certificate is to be presumed, in the absence of evidence to the contrary, to have control over the doing of all work for which the holder is a nominated supervisor.

(3) It is a sufficient defence to a complaint that a holder has been guilty of improper conduct under this section if the holder proves to the satisfaction of the Director-General that the holder used all due diligence to prevent the occurrence of the improper conduct.

15 Section 62 sets out the disciplinary action that may be taken pursuant to s56 of the HB Act:

62 Disciplinary action that may be taken by Director-General

If, after compliance with this Division, the Director-General is satisfied that any ground on which disciplinary action may be taken against the holder of an authority has been established in relation to the holder, the Director-General may do any one or more of the following:

(a) determine to take no further action against the holder,

(b) caution or reprimand the holder,

(c) make a determination requiring the holder to pay to the Director-General, as a penalty, an amount not exceeding $11,000 (in the case of an individual) or $50,000 (in the case of a corporation) within a specified time,

(d) vary the authority held by the holder, by imposing a condition on the authority, including a condition requiring the holder to undertake a course of training relating to a particular type of work or business practice within a specified time,

(e) suspend the authority for a period not exceeding its unexpired term,

(f) cancel the authority,

(g) disqualify the holder, either temporarily or permanently, from being any one or more of the following:

(ii) a member of a partnership, or an officer of a corporation that is a member of a partnership, that is the holder of an authority,

(iii) an officer of a corporation that is the holder of an authority.

16 The respondent’s action was based on findings concerning eight matters, which involved concreting and stencilling work on driveways and other pathways. The work was carried out in Carlingford in September 2003, Glendale in August 2003, Westleigh in August 2003, Winston Hills in March 2003, Wallsend in June 2003, Saratoga in May 2003, Umina Beach in May 2003, and Charlestown in February 2003. During the relevant period the applicant held a contractor licence, which was endorsed as an endorsed contractor licence, under s 26 of the HB Act. The applicant was recorded as the nominated supervisor for Ozkote Pty Ltd during the period 11 July 2002 to 28 July 2004, from which date two other individuals were registered as nominated supervisor.

17 In the response to the Show Cause Notice the applicant’s then solicitor submitted:

-Of the 6,000 jobs undertaken in the past 4 years there had been 10 complaints to the Department of Fair Trading, and all (except one which had gone to arbitration) had been rectified to the satisfaction of the customer

-The applicant was the holder of an endorsed contractor licence for Ozkote for the past 4 years. The applicant was the endorsed contractor licence holder for the Sydney metropolitan area and the complaints made in relation to the Newcastle and Central Coast jobs were not under his supervision or control

-Ozkote had taken steps to rectify the situation by registering two more licensed contractors in the last 2 years.

18 The submissions dealt with each of the 8 complaints, and can be summarised as follows:

Glendale complaint: two separate contracts were signed on separate days which took the total cost to $12,500, and due to an administrative error no certificate of insurance was issued. The complaint related to cracking which is not warranted by Ozkote’s contract; notwithstanding this the job was re-surfaced to the satisfaction of the customer.

Westleigh complaint: an Ozkote employee repaired cracks on two occasions, notwithstanding that the cracking was due to a heavy vehicle having driven on the surface of the driveway.

Winston Hills complaint: after the driveway was resurfaced the customer spilt petrol or another solvent on the surface; Ozkote rectified the job.

Wallsend complaint: the complaint related to cracking which is not covered by the Ozkote contract, and which is common in this area of Newcastle due to subsidence from earth tremors and movements and the mining industry; Ozkote repaired the cracks.

Saratoga complaint: moisture under the sealer caused a milky appearance on the surface of a stencilled driveway, and led to cracking and breaking of the surface; Ozkote re-surfaced the driveway.

Umina Beach complaint: remediation of cracking on the surface of the driveway was undertaken.

Charlestown complaint: a control joint had not been put in place and sealer had been applied when not adequately dry; the cracks and surface were repaired.

19 In relation to all eight matters, the submissions were to the effect that the applicant had not been in breach of the statutory warranty, and had not been guilty of improper conduct. Apart from the Carlingford complaint, all had been rectified by Ozkote Pty Ltd at no expense to the customer, and to the customer’s satisfaction.

Applicant’s case

20 The applicant provided detailed written submissions in support of his application for review. In those submissions the applicant referred to s62(c) of the HB Act, which sets a maximum penalty for an individual of $11,000. The applicant submitted that while he was shown in the register as the only nominated supervisor from 11 July 2002 to 28 July 2004, from January 2003 he was the supervisor for the Sydney area only, and there was another supervisor for the Central Coast and Newcastle area. Only three of the eight cases were supposed to be under his supervision in the Sydney area, and none had been communicated to him nor were supervised by him. He was never aware of those jobs undertaken by Ozkote Pty Ltd, and the remedies to the client for the breach of statutory warranty were settled to the clients’ satisfaction. The other five complaints were not within his area of supervision. The applicant submitted that the fines imposed are not proportional to the facts, and not proportional to the different parties involved.

21 In his oral evidence the applicant stated that he had worked as a concreter for 20 years. He started working for Ozkote Pty Ltd about 5 years ago as a subcontractor, resurfacing and patching concrete. In June 2002 John Byrne, director of Ozkote Pty Ltd, offered him a job as supervisor. He had injured his back and taken time off work, and accepted the job, which required him to do final inspections and pick up cheques. Then slowly he started going back to jobs to fix any problems. In his last 12 to 14 months he was doing repairs, resealing and fixing cracks. He had a crew of two people, and occasionally if someone new started he would go and make sure they were doing things how Ozkote Pty Ltd wanted them done. Ozkote Pty Ltd had about 14 teams of 2 to 3 people. He was never an employee and issued tax invoices and worked for an hourly rate. He had worked for a rate per square metre as a contractor, and that changed to an hourly rate when he became supervisor. His role was to do a final inspection and if the customer was happy to pick up the cheque. Sometimes John Byrne’s wife or a salesman in the area might pick up the cheque. If people called with a complaint he would go and look and report, and they would send the contractor back to fix it. In his last 12 months with Ozkote Pty Ltd Pty Ltd he was full time going to do repairs.

22 The applicant stated that he had not done any of the eight jobs for which there had been complaints. Ozkote Pty Ltd had three offices and up to 10 employees, and did 20 to 30 jobs a week. There were three supervisors that he knew of, but he was the only one registered.

23 In his oral evidence the applicant stated that he could not recall signing any form to become Ozkote Pty Ltd’s nominated supervisor. He had had no advice about the duties of a supervisor. In cross examination, the applicant conceded that he did not do anything to find out what it meant to be the nominated supervisor.

24 The applicant stated that his contractor licence had not been renewed. The respondent’s representative explained that if the penalty was not paid the respondent would cancel the licence. The respondent’s representative stated that he had telephoned the applicant to advise him that he needed to apply for a stay so his licence could be renewed. In cross examination the applicant agreed that he had been told about applying for a stay.

25 The applicant gave oral evidence that his income is currently $750 to $1000 per week, as he is working as a subcontractor. His income had previously been between $1000 to $6000 a week, or an average of $3,500 per week. His wife works and earns $400 per week, and they have a mortgage of $360,000. He owns a 1998 utility which he uses for work, and the lease payments are $500 per month. He now has to work for other people, and is working for a rate per square metre.

26 The applicant’s representative submitted that the applicant had not received any training or advice from the respondent about what the position of nominated supervisor means. None of the eight complaints were matters for which the applicant did the work, or even the final inspection. The applicant had not received a letter of demand, nor any advice that if he did not pay the penalty his licence would be cancelled. He has paid the renewal fee, and the register shows his licence as expired. If disciplinary action is required, a caution or reprimand would be appropriate.

Respondent’s submissions

27 The respondent’s representative submitted that the applicant had not disputed that he was the nominated supervisor, and had taken on the obligation without satisfying himself about the requirements. There was no evidence that the applicant had taken steps to prevent problems whether in the Sydney or Newcastle jobs. The applicant had not provided evidence that he did not have control over the jobs, or that anyone else had. The applicant had accepted the benefits of the role, as it was better for his back, and knew that he had some control, but had not taken any steps to check.

28 The respondent’s representative submitted that s 62 of the HB Act has 7 levels of penalty, and the penalty imposed is in the lower half. The applicant’s earning capacity is now reduced because he did not apply for a stay. There were three jobs in Sydney, so if there is to be a reduction in penalty it could be to $7,500, however in all the circumstances the penalty of $11,000 is appropriate.

Further evidence and submissions

29 During the hearing two issues emerged which both parties agreed could be appropriately dealt with by way of further written submissions.

30 The applicant gave evidence that he had no recollection of having signed a form agreeing to be Ozkote Pty Ltd’s nominated supervisor. The respondent’s representative submitted that there would have been such a form, however it was not in his papers and he was unable to produce it. In response to my request, the respondent’s representative agreed to conduct further searches, and he subsequently filed and served copies of two forms. The first was dated 1 May 2002, and has three parts. One is headed “Nominated Qualified Supervisor”, and provides details of the applicant. Another part of the form is headed “Consent Declaration by Nominated Supervisor”, and appears to be signed by the applicant. The second form was dated 4 July 2002, and is headed “Consent Declaration by Nominated Qualified Supervisor”. That form appears to have been signed by the applicant and by Mr John Byrne on behalf of the contractor licence holder. Attached to the second form was a separate sheet headed “Explanatory Notes”.

31 In written submissions the applicant’s representative noted that the first form had been signed before the issue of the applicant’s contractor licence and was therefore not relevant, and the second was dated the same day as that licence was issued. The applicant’s representative submitted:

Irrespective of the purpose of the forms filed in the proceedings, the applicant denies that he was ever told that he could be held liable for any jobs he did not personally supervise. The evidence in the current proceedings is that the applicant was not involved in any of the work that gave rise to the complaints made against Ozkote Pty Ltd and the applicant says that he would never have agreed to accept responsibility for work that he either did not do himself, or which he did not otherwise supervise.

32 A further matter which arose during the hearing was whether disciplinary action had been taken by the respondent against Ozkote Pty Ltd, or any of the individuals associated with its management. In a letter dated 21 February 2007 the respondent’s representative advised that in related show cause proceedings Ozkote Pty Ltd had its licence cancelled on 20 June 2006, and that Mr John Byrne, Ozkote Pty Ltd’s sole director, had been disqualified for a period of two years from the same date from being the holder of any licence or supervisor certificate and from being an officer of a corporation that holds a licence.

33 In written submissions the applicant’s representative submitted that the cancellation of the licences held by Ozkote Pty Ltd and its director Mr John Byrne was inconsistent with the penalties imposed on the applicant. The applicant’s licence was formally cancelled by the respondent on 12 February 2007 based on the non payment of the penalty. A notation on the register advises that the applicant “has been fined”, and the register also shows two separate notations under the heading “Cancellations and Suspensions”. The overall effect is that a pall has been cast over the applicant’s public record, as well as his ability to earn an income. Two supervisors named on the register are still the holders of licences issued by the respondent.

Consideration

34 Based on the respondent’s records, Ozkote Pty Ltd was issued a contractor licence on 31 July 2002 under s20 of the HB Act, which authorised it to carry out residential building work in the category of “general concreting”; John Byrne was recorded as the director of Ozkote Pty Ltd. Based on the respondent’s records, the applicant held an endorsed contractor licence from 4 July 2002 valid until 4 July 2006, and was recorded on the register maintained by the respondent as Ozkote Pty Ltd’s sole nominated supervisor from 11 July 2002 to 28 July 2004, from which date Mark Sparkes and Edward Byrne were also recorded as nominated supervisors.

35 It is not in dispute that eight complaints were made concerning work undertaken on behalf of Ozkote Pty Ltd during the period February 2003 to September 2003. Three of those complaints related to work carried out in suburbs within the Sydney metropolitan area; the others were for work carried out on the Central Coast and Newcastle area. It is not in dispute that the applicant was not personally involved in performing, or in conducting any inspection of, the work which was the subject of the complaints.

36 The respondent’s representative acknowledged that the quality of the applicant’s concreting and driveway work is not in dispute, and that the issue in this matter is whether the respondent has properly applied a penalty.

Disciplinary action

37 The first issue for determination is whether a ground for taking disciplinary action under s62 of the HB Act has been established. The respondent relied on breaches of the statutory warranty under s18B(a), and argued that as nominated supervisor the applicant had control of the work, and was guilty of improper conduct as defined in s53(1)(b).

38 I find, based on the respondent’s file records, that eight complaints were made concerning work carried out under contract by Ozkote Pty Ltd in Carlingford in September 2003, Glendale in August 2003, Westleigh in August 2003, Winston Hills in March 2003, Wallsend in June 2003, Saratoga in May 2003, Umina Beach in May 2003, and Charlestown in February 2003. In each case the respondent arranged for a building inspection. The building inspection reports held in the respondent’s file report the following items regarded by the inspector as being defective and the contractor’s responsibility:

Glendale: unsatisfactory alignment of stencil pattern, poor colour match in a section of the pattern, and poor surface finish and no colour in patches

Westleigh: application of concrete re-surfacing system; spray-on stencil pattern

Winston Hills: applied finish to driveway

Wallsend: cracking on driveway finish

Saratoga: cracking in spray-on decorative finish

Umina: preparation of remedial work to existing driveway; allowance for movement cracking to driveway

Charlestown: cracking of textured colour stencil finish; lifting of areas of textured colour stencil finish; cloudy appearance to area of textured colour stencil finish

39 Rectification orders were issued in relation to three of the complaints (Saratoga, Umina, and Charlestown). The applicant did not dispute that there were defects in the work as originally carried out. Based on the building inspection reports, I am satisfied that there was a breach of the statutory warranty in s18B(a) of the HB Act in the work carried out for the eight complaints.

40 The applicant did not personally carry out the work, and so the next issue to determine is whether s53 of the HB Act applies to establish that the applicant is guilty of improper conduct as nominated supervisor for Ozkote Pty Ltd. In his written submissions to the tribunal, the applicant sought to distinguish the three complaints for work done in the Sydney area from those in the Central Coast and Newcastle area. The applicant accepted that he had responsibility for supervision of work done on behalf of Ozkote Pty Ltd in the Sydney area. In cross examination, the applicant agreed that he had not watched the work that other people did, and that his role could be described as checking. The applicant’s evidence was that he did not have any knowledge of any of these three jobs.

41 The position in relation to the five jobs in the Central Coast and Newcastle area is different. The applicant’s case is that while he was on the register as nominated supervisor for Ozkote Pty Ltd from July 2002, in reality from January 2003 other employees of Ozkote Pty Ltd were supervisors for the Central Coast and Newcastle areas. In his written submission to the tribunal the applicant stated that this arrangement had been agreed with Ozkote Pty Ltd, and that he had unsuccessfully attempted to obtain documents from Mr John Byrne to confirm this. The applicant provided a copy of a letter dated 15 July 2006 from Mrs Lynn Williams. In that letter Mrs Williams states that she was employed by Design A Driveway Pty Ltd, the company that paid wages to administrative staff of Ozkote Pty Ltd, from November 2002 to December 2004. Mrs Williams states:

During this time Mark Sparkes was a nominated supervisor for the Newcastle area, there were also supervisors in the other areas.

42 In his written submissions the applicant stated that Mrs Lynn Williams would be able to give evidence, however she was not called by either party. In his submissions the respondent’s representative argued that the letter indicated a lack of understanding of what a nominated supervisor is.

43 The building inspection reports held in the respondent’s file state who was present at each inspection. None of the reports mention the applicant. The report for the Westleigh complaint states that Mr John Byrne attended the inspection on behalf of Ozkote Pty Ltd; Mr Mark Sparkes is noted as attending the inspections relating to the Wallsend and Charlestown complaints (19 November 2003 and 22 April 2004 respectively). There is a note in the inspection report relating to the Saratoga complaint of a message that Mr Mark Sparkes had inspected the driveway.

44 The applicant’s evidence was consistent, and he readily conceded that he had not taken steps to understand all the obligations of a nominated supervisor. I accept his evidence as being truthfully given. His evidence that he believed that other employees of Ozkote Pty Ltd had supervision responsibility for work done outside the Sydney metropolitan area after January 2003 is supported by the presence of another employee at two of the inspections, as noted above. While it is also supported by the letter from Mrs Williams, I am unable to give this letter much weight, as its contents were not tested, and demonstrate a misunderstanding of the formal role of a nominated supervisor. There was no evidence given by Mr John Byrne, director of Ozkote Pty Ltd, or any of the other employees.

45 Section 53(2) establishes a presumption that the holder of an endorsed contractor licence has “control over the doing of all work for which the holder is a nominated supervisor”. The term “nominated supervisor” as defined in s3 of the HB Act has two elements, one of which is registration in accordance with the regulations. During the period of the complaints the applicant was the nominated supervisor for all work carried out by Ozkote Pty Ltd. The presumption established under s53(2) can be rebutted by evidence to the contrary. While I accept that the applicant believed that other employees of Ozkote Pty Ltd were supervising work outside the Sydney metropolitan area, I am not satisfied, on the limited evidence available, that any other person had “control” over the work carried out such as to rebut the presumption that, as nominated supervisor, the applicant did. On the applicant’s evidence, he did not take steps to prevent the occurrence of the defective work. That was because, other than when assisting new contractors, he saw his role in the Sydney area as being limited to a final inspection, and because he believed that others had responsibility for work done outside the Sydney area. I am satisfied that the presumption applies, and the applicant is guilty of improper conduct under s53(1)(b) of the HB Act.

Penalty

46 The applicant is guilty of improper conduct under s56(c) of the HB Act. The next issue is whether disciplinary action should be taken under s62 of the HB Act, and if so, what form it should take.

47 As noted in Woolley v Commissioner for Fair Trading, Office of Fair Trading [2005] NSWADT 127, the purpose of disciplinary action is not to punish the applicant, but to protect the public. The purpose, and application, of the sanctions provisions in s62 of the HB Act were discussed by Acting Deputy President Handley in Pilipczyk & Anor v Commissioner for Fair Trading [2007] NSWADT 85:

Building Services Corporation v McIlveen

Director-General, Department of Fair Trading v Cohen

Cohen (2000)

b) the loss or damage and prejudice in consequence of the contraventions

c) the circumstances in which the contraventions took place

d) whether the licensee has been found to have engaged in any similar conduct

e) the presence of fraudulent or dishonest intent and deliberation on the part of the licensee

f) the extent of carelessness or wilfulness of the conduct

g) the efforts made to correct the situation and what measures have been taken by the licensee

h) what consciousness the licensee (a) had (b) displayed, of its obligations under the relevant statute and to the owners

i) the effect upon the licensee

j) antecedents

k) attitude, building history and future compliance

l) the penalty range.”

48 The initial determination, confirmed on internal review, was to impose a penalty of $20,000, being the total of $2,500 for each of the eight complaints. At the hearing, the respondent’s representative conceded that the statutory maximum for an individual in s62(c) is $11,000, and that the amount should be reduced to that amount. The respondent’s representative submitted that $11,000 was an appropriate penalty as for much of the time the applicant had been earning good money. His reduced earning capacity currently was because he had not applied for a stay. The respondent’s representative argued that even if the tribunal accepted that others were in fact supervising the work outside the Sydney area, there were still three jobs in Sydney and so the appropriate amount would be $7,500.

49 The applicant’s representative submitted that an appropriate penalty if one were imposed would be a caution or reprimand, or as an alternative a suspension until July 2006 would have been appropriate. The applicant is in financial difficulty. While this may be partially his fault, he has never received a letter of demand or notification that his licence would be cancelled. His licence is showing as expired and he has paid the renewal money. The respondent’s representative did telephone the applicant, however this is an ad hoc approach, and the applicant was not formally told that his licence would be suspended or cancelled. The company was subject to the complaints, and the applicant performed the duties assigned to him.

50 The provisions of the HB Act and the HB Regulation requiring the appointment of an appropriately qualified nominated supervisor, and in particular, the requirement in cl 26(1)(a) of the HB Regulation that an applicant for a contractor licence have sufficient nominated supervisors, are clearly intended to protect the public by ensuring that building work is done, or supervised, by qualified individuals.

51 In considering the nature and circumstances in which the breaches of statutory warranty took place, I accept that that applicant had no direct responsibility for those breaches. There is no issue as to his personal competence, and his responsibility is indirect. The applicant’s evidence was that all the complaints have been resolved to the satisfaction of the customers, and the respondent’s representative did not dispute that.

52 Clause 28 of the HB Regulation sets out the qualifications and experience required of a nominated supervisor, and cl 26(4) requires an individual who is to be a nominated supervisor to make a consent declaration. The applicant signed a Consent Declaration on 4 July 2002. That declaration includes the following statement:

I am a genuine full-time employee of the above named [Ozkote Pty Ltd] and I am well aware of the responsibilities of being the nominated supervisor. …

53 The applicant’s response to this form is set out in para 31 above, and this is consistent with his evidence at the hearing. I accept that the applicant did not fully understand the nature of the responsibilities he was undertaking when he agreed to be Ozkote Pty Ltd’s nominated supervisor. He has not disputed signing the form, and while the Explanatory Notes attached to that form do not set out the responsibilities of a nominated supervisor, the applicant had an obligation to find out what those responsibilities are before he agreed. However, the applicant was not a director of Ozkote Pty Ltd, and thus had no involvement in decisions about where the company would conduct its business, and which employees or contractors would take on particular work. He was therefore at a disadvantage should the company not ensure that it had sufficient nominated supervisors to ensure that all work was properly supervised.

54 The most significant impact so far on the applicant has been the suspension and cancellation of his contractor licence for failure to pay the penalty imposed. The respondent’s register contains a notation that the applicant has been fined with effect 26 June 2006; and there are two records of cancellation. The applicant’s representative submitted that this has affected his public record and his ability to earn an income as a licensed tradesman.

55 Section 67 of the HB Act provides that any authority held by a person required to pay a monetary penalty is suspended until the amount is paid, or, if the amount is not paid before the authority would otherwise expire, is cancelled. The applicant acknowledged in cross examination that he was informed by the respondent’s representative that he could apply for a stay.

56 The letter dated November 2005 informing the applicant of the initial determination advises him of the right to appeal to the tribunal, and contains the following paragraph, in bold:

Please note that if you do not pay the amount of $20,000 to the Commissioner within 28 days from the date of this notice of decision is served or is taken to be served, section 67(1) of the Act provides that the contractor licence held by you is taken to be suspended until that amount is paid to the Commissioner, and the Commissioner may recover that amount as a debt owed to the Commissioner.

57 The letter advising the applicant of the outcome of the internal review states that the amount of $20,000 is payable within 28 days. This letter outlines the applicant’s appeal right, however it does not state that suspension or cancellation may result if that amount is not paid. This determination was made on 20 June 2006, and the applicant’s licence was due to expire on 4 July 2006. While I accept that the respondent’s representative provided some verbal advice to the applicant, I agree with the applicant’s representative that this is not sufficient. Individuals in the position of the applicant should be clearly advised in writing of the consequences of not paying the penalty, or not exercising their appeal rights (which include the right to apply for a stay under s60 of the Administrative Decisions Tribunal Act 1997).

58 While not discussed in Cohen, I regard the sanctions imposed on others involved in the contraventions, in this case Ozkote Pty Ltd and its director, as relevant in assessment of an appropriate penalty. The internal review determination took into account the record of Ozkote Pty Ltd as holder of a contractor licence, and noted that there had been over 100 complaints made against the company, and 19 more complaints after November 2005. The respondent’s solicitor advised that in related show cause proceedings Ozkote Pty Ltd had its licence cancelled on 20 June 2006, and its sole director, Mr John Byrne, was disqualified for a period of two years from the same date from being the holder of any licence or supervisor certificate and from being an officer of a corporation which holds a licence. The indirect responsibility of the applicant for the contraventions suggests that disciplinary action lower down the scale set out in s62 would be warranted.

59 Having regard to all these factors, I consider that some form of disciplinary action is warranted in the interests of public confidence and deterrence. I accept the applicant’s evidence that the imposition of a financial penalty would cause hardship. The applicant has in effect served a suspension since July 2006. In those circumstances I consider that a more appropriate sanction than a penalty would be to caution the applicant as permitted by s62(b) of the HB Act.

Decision

60 The decision under review is set aside, and in substitution for that decision the applicant is to be issued with a caution in respect of improper conduct as nominated supervisor in relation to work carried out by Ozkote Pty Ltd.

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Citations

Macerola v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 144

Most Recent Citation

Commissioner for Fair Trading v Cruz [2009] NSWADTAP 51

Cases Citing This Decision

1

Commissioner for Fair Trading v Cruz [2009] NSWADTAP 51

Cases Cited

2

Statutory Material Cited

3

Woolley v Commissioner for Fair Trading, Office of Fair Trading [2005] NSWADT 127

Pilipczyk & anor v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 85

CITATION:	Macerola v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 144
DIVISION:	General Division
PARTIES:	APPLICANT Vincenzo Fortunato Macerola RESPONDENT Commissioner of Fair Trading, NSW Office of Fair Trading
FILE NUMBER:	063274
HEARING DATES:	7 February 2007
SUBMISSIONS CLOSED:	7 March 2007
DATE OF DECISION:	2 July 2007
BEFORE:	Pearson L - Judicial Member
CATCHWORDS:	Home Builder - improper conduct - Home Building Act - home builder - improper conduct
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Home Building Act 1989 Home Building Regulation 2004
CASES CITED:	Director-General, Department of Fair Trading v Cohen [2000] NSWFTTT 3 Pilipczyk & Anor v Commissioner for Fair Trading [2007] NSWADT 85 Woolley v Commissioner for Fai
REPRESENTATION:	APPLICANT T Boyle, solicitor RESPONDENT W Maynard, solicitor
ORDERS:	The decision under review is set aside, and in substitution for that decision the applicant is to be issued with a caution in respect of improper conduct as nominated supervisor in relation to work carried out by Ozkote Pty Ltd.