Tourni v Commissioner for Fair Trading, NSW Office of Fair Trading

[2007] NSWADT 188

CITATION:	Tourni v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 188
DIVISION:	General Division
PARTIES:	APPLICANT Kosta Tourni RESPONDENT Commissioner for Fair Trading, NSW Office of Fair Trading
FILE NUMBER:	073033
HEARING DATES:	7 May 2007
SUBMISSIONS CLOSED:	5 June 2007
DATE OF DECISION:	20 August 2007
BEFORE:	Pearson L - Judicial Member
CATCHWORDS:	Home Builder - issue of contractor licence - Home Building Act - home builder - suspension of contractor licence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Home Building Act 1989 Home Building Regulation 2004
CASES CITED:	Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Hughes & Vale Pty Ltd v State of New South Wales (1955) 93 CLR 127 Bejjani v Commissioner for Fair Trading [2004] NSWADT 262 Calleia v Commissioner for Fair Trading [2005] NSWADT 42 Corkin v Director General, Department of Fair Trading [2001] NSWADT 190
REPRESENTATION:	APPLICANT In person RESPONDENT B Bourke, solicitor
ORDERS:	The decision under review is affirmed

Background

1 On 15 November 2005 the applicant lodged an application under the Home Building Act 1989 (the HB Act) for a Contractor Licence to carry out Wall and Floor Tiling (application 181015C). In this application the applicant answered “no” to the question “have you, in the last 5 years, had a conviction for a criminal offence recorded, or are you now subject to a bond or have a criminal charge pending?” The applicant had also answered “no” to the question asking, in part, “have you in the last 3 years been bankrupt…?”. Searches conducted by an officer assessing the application revealed that the applicant had lodged a debtor’s petition on 26 June 2001 and was discharged from bankruptcy on 27 June 2004. An officer assessing the application contacted the applicant, who in a telephone conversation advised that he had a criminal record. Application 181015C was refused on 24 March 2006 on the basis that the applicant did not meet the requirements of s20(1)(a) or (b) of the HB Act.

2 The applicant lodged a further application (187247C) on 11 July 2006, and this was refused on 18 August 2006. In application 187247C the applicant answered “yes” to the question about criminal record, and provided copies of documents showing that he had been declared a Habitual Traffic Offender on 29 June 2002, and had a Court Fine Enforcement Order to pay a fine of $345 in relation to malicious damage by 28 December 2005. The application was refused on the basis that the applicant did not meet the requirements of s20(1)(a) or (b) of the HB Act.

3 The applicant requested internal review of the decision to refuse application 187247C. The decision was affirmed on 16 January 2007, on the basis that the applicant had been bankrupt within the period of three years before the application and did not take all reasonable steps to avoid the bankruptcy; that he had not disclosed that he was a bankrupt in the two applications; that his criminal history demonstrated that he is not a fit and proper person to hold a contractor licence; that he had not disclosed a criminal history in the first application and had not been honest in both applications; that his medical history demonstrates that he is not a fit and proper person to hold a contractor licence; and that the information in the applicant’s medical history records indicates that he is a medically incapacitated person.

4 The applicant applied to the Tribunal for review of this decision. The respondent filed copies of the documentation relating to application 181015C and application 187247C. Those documents included details of the applicant’s criminal record and medical history. The applicant filed a copy of a report by Dr Tanya Ahmed of the Canterbury Community Health Centre. On 2 May 2007 the respondent filed written submissions. In those submissions the respondent was no longer relying on the ground that the applicant’s medical condition means that he does not meet s20(1)(b) of the HB Act.

5 A hearing was held on 18 May 2007 and oral evidence was given by the applicant, and by Mr Darren Steen, a friend of the applicant. After the hearing the applicant sent a letter to the Tribunal. The respondent was provided with a copy of this letter, and made written submissions in response.

Legislation

6 Under s19 of the HB Act the Commissioner may grant contractor licences. Section 20 of the HB Act provides:

20 Issue of contractor licences

(1) The Director-General must reject an application for a contractor licence if:

(a) the Director-General is not satisfied that the applicant is a fit and proper person to hold a contractor licence, or

(b) the applicant is a mentally incapacitated person, or

(c) the applicant is disqualified by this Act or the regulations from holding a contractor licence.

(1A) Without limiting subsection (1) (a), in determining whether an applicant is a fit and proper person to hold a licence the Director-General is to consider whether the applicant is of good repute, having regard to character, honesty and integrity.

(2) The regulations may fix or provide for the Director-General to determine additional standards or other requirements that must be met before any contractor licence is issued or before a contractor licence of a particular kind is issued.

7 Clause 25 of the Home Building Regulation 2004 (the HB Regulation) provides:

25 General requirements for obtaining certain authorities under the Act

(1) Before an authority (other than an owner-builder permit) is issued, the Director-General must be satisfied that:

(a) each relevant person in relation to the application for an authority:

(i) is not disqualified from holding the authority or an authority of the kind applied for, or from being a member of a partnership or a director of a corporation that is the holder of the authority or an authority of the kind applied for, and has not been so disqualified within 3 years before the date of the application, and

(ii) is not a debtor under a judgment for money owed to the Director-General or the Administration Corporation that has not been satisfied, and

(iii)–(v) (Repealed)

(vi) is not subject to any order of the Tribunal that has not been satisfied within the period required by the Tribunal, and

(vii) has not had what the Director-General considers to be an unreasonable number of complaints made against him, her or it, and

(viii) has not had what the Director-General considers to be an unreasonable number of formal cautions given to him, her or it, and

(ix) has not had what the Director-General considers to be an unreasonable number of penalty notices issued against him, her or it (being penalty notices for offences under the Act that were not dealt with by a court and dismissed), and

(x) has not carried out work in respect of which the Director-General considers an unreasonable number of insurance claims have been paid, and

(xi) was not a director, partner or person concerned in the management of a company or partnership that was disqualified from holding an authority within 3 years before the date of the application, unless the Director-General is satisfied that the applicant took all reasonable steps to prevent the conduct that led to the disqualification, and

(xii) except in relation to an application for a tradesperson certificate—is not bankrupt or a director or person concerned in the management of a company that is the subject of a winding up order or for which a controller or administrator has been appointed, and

(xiii) except in relation to an application for a tradesperson certificate—was not, within the period of 3 years before the date of the application, bankrupt or a director or person concerned in the management of a company when the company was the subject of a winding up order or when a controller or administrator was appointed, and

(b) the applicant, if an individual, is not an apprentice or a trainee.

8 Clause 26(3) of the HB Regulation provides:

(3) Despite clause 25 (1) (a) (xiii), the Director-General may issue a contractor licence if the Director-General is of the opinion that:

(a) there is no evident risk to the public that the applicant will be unable to complete building contracts entered into in the future for the doing of residential building work or specialist work of that kind, or both, and

(b) the relevant person concerned took all reasonable steps to avoid the bankruptcy, liquidation or appointment of a controller or administrator.

9 The applicant gave oral evidence which can be summarised as follows. The applicant has been a wall and floor tiler for 18 years, and has completed a three year TAFE course. He had held a trade certificate, and had been told that he needed to have a contractor licence to continue putting his card in tiling shops. He had in the past worked with his brother who has a company of ten people. He does not get on very well with his brother because he is pedantic about how he does jobs and takes his time. He has not worked with his brother for about four or five years. The applicant said that he has no problem dealing with customers. He did not disclose that he was bankrupt in making the application because he did not believe he fell within the time frame of 3 years. He gave the respondent a copy of the charge of malicious damage.

10 In cross examination the applicant stated that he did not think that he needed to disclose his driving offences as he did not think that they are criminal offences.

11 The applicant was questioned as to how he completed the two application forms. The applicant stated that he has difficulty reading and writing, and his sister has done all the bookwork for him. His sister filled out the form for application 181015C, and his friend Darren Steen filled out the form for application 187247C. The applicant acknowledged that it is his signature on both forms.

12 In relation to question 10 in application 181015C, he told his sister to say “yes” because of his conviction for malicious damage. He told his sister to say “yes” to question 11, and she put yes and then no, because she did not think he would get a licence. He faxed all the details about his bankruptcy to the respondent when they asked for it. His sister did not read out the declaration on page 1 of the application form, and he just signed it.

13 The applicant was questioned about the completion of application 187247C. Question 4 asks about criminal record and he said “yes” because of the conviction for malicious damage. He had kicked a car door. He had faxed all the details to the respondent. In relation to the question about being bankrupt in the last 3 years, he filled out the form in 2006, and had been bankrupt in 2001, so he said “no”. He discussed that with Darren. Darren had read out the questions and he had answered them. They discussed the question about bankruptcy and asked for a third opinion from a friend. He agreed that he had not contacted the respondent to ask for clarification.

14 Mr Darren Steen gave evidence, and said that he has known the applicant for 16 years. He helped him through TAFE, where he had problems with reading and writing. They have worked together on jobs. Mr Steen said that he did the invoices for the applicant, and had helped him complete the application form. The applicant ticked “yes” to the question about criminal record because between the first and second application he had had the malicious damage charge. In relation to the question about bankruptcy, there had been other people around at the time and they had discussed this, and the consensus was that the answer should be “no”.

15 Mr Steen was questioned about a letter sent by the applicant dated 27 January 2006 which refers to the bankruptcy. Mr Steen stated that the letter is not in his handwriting. He could remember the applicant writing around this time but he did not go into detail. The applicant was then questioned about the letter of 27 January 2006, and stated that his sister in law had written it on his behalf.

16 The applicant was questioned about the bankruptcy. The applicant stated that he had had a breakdown in 1999, which came about because he was working too hard, and had lost a relationship. He ended up in a psychiatric ward, and could not do anything. He had been running his business with 8 employees. The business went down because he was not there to operate it. He owed $28,000, to six creditors. He had taken out a loan to pay Westpac for his car insurance, and money he owed to three people, a builder, his brother and a friend. He owed money to the builder because he had taken progress payments and then could not get to the job. He had borrowed money for a work vehicle. His brother helped him with the bankruptcy, and had advised him to go bankrupt and start all over again. He tried to avoid the bankruptcy by borrowing money but was going backwards. He was in prison for driving offences and could not pay the money back. At the time of the bankruptcy he spoke to a few people who told him the same thing. He was unwell, in hospital, and needed to go bankrupt. He went from the hospital to prison and could not earn money to pay his bills.

17 The applicant said that he is a changed person since the bankruptcy and after his breakdown. He has not smoked marihuana for a year and a half. He now sees his psychiatrist every three months and takes medication. The applicant was questioned about the malicious damage charge in September 2005. The applicant stated that he had not been taking his medication and became paranoid, and kicked the car door to stop the person from following him.

18 The applicant stated that he would be able to comply with the obligations under the legislation. His sister or his sister in law would help him with paperwork. He would only take on small jobs.

Submissions

19 The respondent’s representative submitted that there are concerns about the applicant’s bankruptcy, in particular that he took no steps to obtain legal or financial advice to avoid bankruptcy. There are also concerns with the applicant’s awareness of his obligations under the HB Act as the holder of a contractor licence, especially relating to insurance, deposits, and accuracy in completing forms. There are also concerns about the malicious damage charge in September 2005. The applicant’s doctor has said that he has been stable for 2 years, and the malicious damage charge occurred during this period. The applicant can continue to work as an employee without a contractor licence.

20 The applicant argued that he cannot work for an employer, as he is too slow and pedantic for other people. He started a TAFE literacy and numeracy course three weeks ago on the advice of his case manager. If he made a mistake in filling out the form it was an honest one. If he is issued with a contractor licence he would take on an apprentice, and is confident his business would be viable.

21 After the hearing the applicant wrote to the Tribunal stating that a further reason why he cannot work for other people is that he does not have a drivers licence. If he can work for himself he plans to employ an apprentice to drive them both to jobs, in a car which he would supply. The main reason why he could not avoid bankruptcy was that he had to go to prison for his driving offences, and had no income.

22 The respondent was invited to respond to this further statement. In a written submission the respondent noted that the applicant has been declared a Habitual Traffic Offender and disqualified from driving until 5 May 2018, and submitted that the fact that he is without a driver’s licence is an issue caused by the applicant alone and should not be a relevant factor in determining whether or not he is fit to hold a contractor licence.

Consideration

23 The central facts are not in dispute. Based on the documents held on the respondent’s file, the applicant was discharged from bankruptcy on 27 June 2004. The total liabilities disclosed were $27,222.78, and the creditors were Telstra ($915.79), NRMA Insurance ($5,090.94), Esanda Finance ($2,462.51), and Westpac ($3,646.57, $947.81, and $14,160.06).

24 The NSW Police Service criminal history on the respondent’s file lists several convictions, for driving offences and for a range of other offences including assault and malicious damage. The most recent conviction was on 5 September 2005 for the offence of maliciously destroy or damage property, for which the applicant was fined $200, ordered to pay compensation, and placed on a bond. In relation to the driving offences, the applicant was declared a Habitual Traffic Offender on 6 June 2001, and is disqualified from driving until 5 May 2018.

25 Based on the copy of the application form held on the respondent’s file (181015C), on 14 November 2005 the applicant applied for a contractor licence. Question 10 of the application form asks:

Have you, in the last 5 years, had a conviction for a criminal offence recorded, or are you now subject to a bond or have a criminal charge pending?

26 The “No” box is ticked. Based on the NSW Police Service criminal history records, in the five year period before 14 November 2005 the applicant had the following convictions recorded:

6 June 2001

Resist officer in execution of duty: home detention 6 months

Drive while disqualified: home detention 12 months

Possess prohibited drug: fine

Drive vehicle recklessly: home detention 12 months

Use offensive language: fine

Resist officer: fine

Carry cutting weapon: fine

Resist officer: fine

1 August 2003

Wilful offensive behaviour: fine

Go into restricted area of station: fine

5 September 2005

Malicious damage: fine

27 Question 11 asks:

Have you in the last 3 years been bankrupt or assigned their property to pay debts or ever been a director or manager of a company which was subject to a winding up order, placed in receivership or administration, or under official management, had a controller appointed or entered into other arrangements with creditors due to insolvency?

28 A tick in the “yes” box has been deleted, and the “No” box is ticked.

29 On 9 December 2005 an officer advised the applicant in writing that a search had shown that he had been discharged from bankruptcy on 27 June 2004. That letter requested further information, including the reasons for the bankruptcy.

30 The respondent’s file contains a copy of a fax received on 22 December 2005, requesting further time to submit medical history records. A file note dated 16 January 2006 includes the following:

Spoke to Kosta re his fax. Kosta advised that he also had a criminal offence which had not ben mentioned on the application form.

Kosta will provide information regarding the bankruptcy also reasons for non disclosure in relation to criminal offence and bankruptcy, medical certificate to be provided.

31 On 27 January 2006 the applicant sent a letter to the respondent, in which he stated:

The reason for my bankruptcy was due to my mental health/breakdown, being paranoid schizophrenia. This was diagnosed by the doctors at Bankshouse Mental Institution. As a result of this, I was unable to work to the best of my ability, but on numerous occasions I would attempt to resume my work, but found it too difficult. I also went to prison for driving while disqualified, and as a result was unable to do any work for a period of time. As a result of this I had no choice but to declare bankruptcy.

32 The applicant provided details of the bankruptcy, including details of the creditors.

33 Based on the copy of the application form held on the respondent’s file, on 9 July 2006 the applicant applied for a contractor licence (187247C). Question 4 of the application form asks, among other things:

Have you, in the past five years, had a conviction for a criminal offence recorded, or are you now subject to a bond, or have a criminal charge pending?

34 The word “Yes” is circled. The form states “Attach details”. Attached to the application is a copy of the Habitual Traffic Offender Declaration dated 29 June 2002, and a copy of a Court Fine Enforcement Order for payment of $345 by 28 December 2005, in relation to the malicious damage conviction. There was no information provided concerning the convictions recorded on 1 August 2003.

35 Question 4 also asks:

Have you, in the last three years, been bankrupt or assigned your property to pay debts?

36 The word “No” is circled.

37 Based on the above documents, I find that in application 181015C the applicant did not disclose his criminal convictions, or the fact that he had been bankrupt, during the relevant periods. I find that in application 187247C the applicant did not disclose the full details of his criminal convictions, or the fact that he had been bankrupt, during the relevant periods.

38 The first issue for determination is whether the applicant is a fit and proper person to hold a contractor licence, as required by s20(1)(a) of the HB Act. Subsection 20(1A) requires that consideration be given as to whether the applicant is of good repute, having regard to character, honesty and integrity.

39 The Tribunal has frequently cited the decision in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 as a guide to the meaning of “a fit and proper person”. In that case Toohey and Gaudron JJ stated (at 380):

The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.

40 Their Honours further stated (at 388):

The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration.

41 The activities in which the person will be engaged are relevant to consideration of whether he is a “fit and proper person”: Hughes & Vale Pty Ltd v State of New South Wales (1955) 93 CLR 127 at 156-7. Past improper conduct of an applicant must be considered in light of the activity which is to be licensed, and not at large: Bejjani v Commissioner for Fair Trading [2004] NSWADT 262; Corkin v Director General, Department of Fair Trading [2001] NSWADT 190.

42 In this case, the offences for which the applicant was convicted do not relate to his work as a tiler. There is no indication from the material before the Tribunal that he is not competent to carry out that work. However, it is relevant in considering the applicant’s character, honesty and integrity, that he did not disclose his bankruptcy when completing either application form, and did not fully disclose his criminal record when completing either application form.

43 Considering first the failure to disclose the bankruptcy, I note that Question 11 in application 181015C is complex, and its drafting could give rise to some confusion in some contexts: Calleia v Commissioner for Fair Trading [2005] NSWADT 42. The evidence was, however, that the applicant understood that only the first part of that question, asking about bankruptcy, applied to him. Question 4 in application 187247C is more clearly drafted, and simply asks whether the applicant has, in the last three years, “been bankrupt”. I accept that the applicant’s poor literacy means that he relied on the assistance of others in completing the application forms. However, on his evidence, the appropriate response to the questions about bankruptcy was discussed as part of the process of completing both application forms. No attempt was made to clarify the issue, and in relation to application 181015C, the response was intended to assist the applicant to obtain the licence. The fact that the respondent requested information from the applicant concerning the bankruptcy while application 181015C was under consideration should have indicated to the applicant when completing application 187247C that this was a relevant factor which should have been disclosed. In his letter to the respondent dated 27 January 2006 the applicant refers to “my bankruptcy which occurred in June 2001 and ending in June 2004”. I am satisfied that at the time of completion of application 187247C in July 2006, the applicant was aware that his bankruptcy had extended for a three year period, ending in June 2004.

44 In relation to the non-disclosure, and subsequent incomplete disclosure, of his criminal record, the applicant’s evidence was unsatisfactory. His evidence that he did not consider the driving offences to be “criminal” is not consistent with his provision of a copy of the Habitual Traffic Offender Declaration with application 187247C. Further, apart from providing information concerning the malicious damage conviction in 2005, the applicant failed to disclose his other convictions for offences unrelated to driving.

45 The applicant provided details of his medical history. These records indicate an extended history of hospital admissions from July 1999. The most recent evidence as to his mental health comes in a report dated 5 April 2007, provided by Dr Tanya Ahmed, which states in part:

He has a mental illness, schizophrenia, for which he receives treatment. His condition has been stable for at least 2 years, he is compliant with treatment and has good insight into his condition. He has also rehabilitated from drug use.

46 In a letter dated 31 August 2006 Ms Natalie Sawtschek, the applicant’s Personal Support Program Manager, states in part:

Over the previous 3 months, I have observed a marked improvement in Mr Tourni’s behaviour and cognitive function and believe his treatment has brought his illness under control. I have been encouraging Mr Tourni to participate in part-time work, as I believe this activity would greatly facilitate his recovery. I fully support Mr Tourni’s efforts to renew his trade certificate and commence employment.

47 I accept that the applicant’s criminal offences occurred during periods when, based on the medical records on the respondent’s file, he was unwell. I accept that his bankruptcy was related to the circumstances in which he found himself in 2001, with significant debt and an inability to work due to his hospitalisation and subsequent imprisonment. However, the applicant completed the two application forms during a period when, on the evidence of Dr Ahmed, his condition has stabilised. I consider that the failure to disclose details of the criminal convictions and the bankruptcy points to a conclusion that the applicant lacks the character, honesty and integrity to be regarded as being a fit and proper person to hold a contractor licence. That conclusion would not, however, prevent the applicant being regarded as a fit and proper person should he decide to lodge a fresh application, making full disclosure of all relevant information. This conclusion also makes it unnecessary to determine whether the applicant can satisfy cl 26(3) of the HB Regulation, and I make no findings in that regard. I note, however, that in any event this would not be a consideration for any application lodged after 27 June 2007.

Order

The decision under review is affirmed.