Valstar v Commissioner for Fair Trading

[2005] NSWADT 102

CITATION:	Valstar v Commissioner for Fair Trading [2005] NSWADT 102
DIVISION:	General Division
PARTIES:	APPLICANT Klaas Arie Valstar RESPONDENT Commissioner for Fair Trading, Office of Fair Trading
FILE NUMBER:	043302
HEARING DATES:	3/2/2005
SUBMISSIONS CLOSED:	02/03/2005
DATE OF DECISION:	05/10/2005
BEFORE:	Molony P - Judicial Member
APPLICATION:	Home builder - issue of building consultants licence - Home Building Act - home builder - issue of building consultants licence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Appeals Tribunal Act 1975 (Cth) Administrative Decisions (Judicial Review) Act 1977 (Cth) Administrative Decisions Legislation Amendment Act 1997 Home Building Act 1989 Home Building Lesislation Amendment Act 2000 Home Building Regulation 2004 Interpretation Act 1987 Licensing and Registration (Uniform Procedures) Act 2002
CASES CITED:	Ansett Transport Industries (Operations) Pty Ltd v Taylor (1987) 18 FCR 498; 12 ALD 547; 73 ALR 193 Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500; ARM Constructions Pty Ltd v DCT (1986) 10 ALN N118; 10 FCR 197 Bergin v White; Ex parte Bergin [1956] St R Qd 432 Brutus v Cozens [1973] AC 854.) Casey v Repatriation Commission (1995) 39 ALD 34 Dornan v Riordan (1990) 21 ALD 255; 95 ALR 451. Hatfield v Health Insurance Commission (1987) 15 FCR 487; 14 ALD 131; 77 ALR 103 Higgon v O’Dea [1962] WAR 140 Ileris and Comcare [1999] AATA 647 Jedko Game Co Pty Ltd v Collector of Customs (1987) 12 ALD 491 Magor and St. Mellons R.D.C. v. Newport Corporation (1952) AC 189 Marshall v Watson (1972) 124 CLR 640 Puglisi -v- Director of Fisheries, NSW Fisheries [1999] NSWADT 110 Re Palmer and Minister for the Capital Territory (1978) 1 ALD 193; 23 ALR 196 Shulver v Sherry (1992) 28 ALD 570 Soldatow v Australia Council (1991) 22 ALD 750 Thompson v Goold & Co [1910] AC 409 United Bonded Fabrics Pty Ltd v Roseman [2000] NSWADTAP 13
REPRESENTATION:	APPLICANT In person RESPONDENT A Wilson, solicitor
ORDERS:	The decision of the Commissioner made 23 August 2004 to refuse Mr Valstar a building consultants licence (pre-purchase inspections) is set aside and substituted with a decision that a building consultants licence (pre-purchase inspections) be issued to Mr Valstar subject to the applicable conditions contained in Division 2 of Part 4 of the Home Building Regulation 2004.

Background

1 On 13 January 2004 Mr Valstar applied to the Commissioner for an individual building consultancy licence. At that time he held, and he continues to hold, a contractor (supervisors) licence under the Home Building Act 1989. His company, K A V Building Services Pty Ltd also holds a contractor licence under the Home Building Act 1989, a condition of which is that it only enters contracts for work not requiring home warranty insurance.

2 K A V Building Services Pty Ltd has since 1996 only done building consultancy work, principally pre-purchase inspections and pest inspections. Before then it did a mixture of construction work, pre-purchase inspections and building consultancy work.

3 On 5 April 2004 the Commissioner determined to refuse the application for an individual building consultancy licence and advised Mr Valstar of that decision in writing. On 28 April 2004 Mr Valstar wrote to the Commissioner seeking an internal review of the decision to refuse his application.

4 On 23 August 2004 a review officer determined to affirm the decision to refuse Mr Valstar an individual building consultancy. The basis for that refusal was twofold. First, it was found that Mr Valstar had not produced the evidence necessary to demonstrate that he had the experience required to enable him to do building consultancy work. Secondly, the review officer concluded that Applicant had provided “information which is misleading and of a fraudulent nature”. As a consequence, Mr Valstar was found not to be a fit and proper person to hold a building consultancy licence.

5 On 13 September 2004 Mr Valstar lodged an application with this Tribunal seeking to review that decision. The Tribunal’s jurisdiction to review the decision is to be found in s.83B of the Home Building Act 1989, when read with s.38 of the Administrative Decisions Tribunal Act 1997. In considering the review the Tribunal is required to make the correct and preferable decision based on the evidence before it.

6 A preliminary conference was held in this matter at which the issues in contention between the parties were narrowed down to two. These were:

“Whether Mr Valstar meets the experience requirements set out in the ‘Information Brochure and Application” with respect to:

(a) evidence of accreditation; and

(b) evidence of having professional indemnity insurance with a 5 year no claims history covering pre-purchase inspections.”

The Respondent elected not to pursue the allegation that Mr Valstar is not a fit and proper person to hold a building consultancy licence.

7 Section 32A of the Home Building Act 1989 provides that the Commissioner may issue a building consultancy licence (ss.(1)). Building Consultancy Work is defined in s.3 of the Act in wide terms, but that definition provides for types of work to be excluded from the definition by the Regulation. The Home Building Regulation 2004 does exactly that, providing that all work, other than pre-purchase inspection reports of a dwelling or part of a dwelling, is excluded from the definition. Clause 4 provides:

“(1) For the purposes of the definition of building consultancy work in section 3 (1) of the Act, all work other than pre-purchase visual inspections of a dwelling or any part of a dwelling is declared to be excluded from the definition.

(2) To avoid doubt:

(a) pre-purchase inspections undertaken for the sole purpose of providing a report on pest infestations, and

(b) inspections solely of specialist work,

are declared to be excluded from the definition of building consultancy work .”

8 Section 32B provides for the establishment of requirements to be satisfied before a building consultancy licence is issued:

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

(3) The Director-General must reject an application for a building consultancy licence if:

(a) the Director-General is not satisfied that any such requirement would be met were the building consultancy licence to be issued, or
(4) A decision of the Director-General relating to determining standards or other requirements under subsection (2) cannot be reviewed by the Administrative Decisions Tribunal in an application for review made under this or any other Act.”

9 Further requirements for the issue of building consultancy licence are to be found in clause 37 of the Regulation:

“(1) Before a building consultancy licence is issued, the Director-General must be satisfied:
(a) that the applicant, if an individual, has such qualifications or has passed such examinations or practical tests, or both, as the Director-General determines to be necessary to enable the applicant to do the work for which the licence is required, and

(b) that the applicant, if an individual, has had experience of such a kind, and for such a period, as the Director-General considers would enable that applicant to do the work for which the licence is required, and

(c) …

(e) that any individual who is an applicant, and each individual who is a member of a partnership and each director of a corporation that is a member of a partnership or of a corporation that is an applicant, is not disqualified from holding a contractor licence or a certificate, or from being a member of a partnership or a director of a corporation that is the holder of a contractor licence or of a certificate.”

…

10 Pursuant to s.32B(2) the Commissioner has determined standards that must be met before a building consultancy licence enabling its holder to undertake pre-purchase inspection, consultancy work. Those standards are to be found in a document entitled ‘Information Brochure and Application”, available from the Commissioner. The standards set are:

“QUALIFICATION CRITERIA

Hold a current contractor licence for building or be eligible to obtain such a licence AND

Have five years experience in pre-purchase inspection of residential building work evidenced by:

Being accredited by a recognised industry group or TAFE NSW:

- Archicentre Limited

- Australian Institute of Building

- Australian Society of Building Consultants

- Housing Industry Association

- Institute of Building Consultants

- Master Builders Association (New South Wales)

- Master Builders Association (Newcastle);

OR

Providing evidence of having Professional Indemnity Insurance with a 5 year no claims history covering pre-purchase inspections

OR

Undertaking an independent assessment administered by TAFE NSW for the purpose of ascertaining extent of knowledge required in performing pre-purchase inspections. Referrals will be issued on recommendation of the Qualification Committee.”

11 There is no doubt that Mr Valstar holds a current contractor licence and that he has more than five years experience in pre-purchase inspection of residential building work. The Applicant does not wish to undertake an independent assessment as he contends that his experience in the field is sufficient.

12 The issues are whether he can satisfy the evidentiary requirements of the standards to demonstrate that his five years experience in pre-purchase inspection of residential building work is evidenced by him being:

a) accredited by a recognised industry group or TAFE NSW, or

b) providing evidence of having Professional Indemnity Insurance with a 5 year no claims history covering pre-purchase inspections.

13 With respect to both these requirement there was some debate before me as to exactly what the standards required.

Accreditation

14 While the standard specifies that applicants for a building consultancy licence (pre-purchase inspections) have to be accredited by the relevant industry groups or TAFE NSW to satisfy it, it is not at all clear what they have to be accredited for (or to do). The standard does not specify what is required. I asked Mr Wilson, who appeared for the Commissioner, what applicants had to be accredited for (or to do) by the industry groups, but he was unable to assist me. He did say that he understood that the Southern Institute of TAFE offers an assessment for pre-purchase inspections, but was unable to tell me what that involves, or how long it has been offered for. The Applicant disputed this, saying that TAFE did not offer any applicable courses. I understood Mr Wilson to be referring to an independent assessment satisfying the alternative criteria set out in the last, quoted paragraph of the standard.

15 Mr Wilson rightly pointed out that as Mr Valstar offered no evidence of accreditation by an industry group, the issue was not strictly relevant to the issue to be determined. The Applicant did have a letter from the Master Builders Association accepting his application for accreditation, and requiring him to sit an exam in order to progress the application. The Applicant is yet to sit that exam. As a result, Mr Valstar conceded that he did not have evidence of accreditation for any purpose with any of the named industry groups.

16 The Applicant did, however, refer to a number of qualifications which he claimed should meet the requirements of accreditation by TAFE. These were

a) a certificate from the NSW Department of Technical and Further Education dated 31 December 1973 showing that Mr Valstar had completed the Carpentry and Joinery Course;

b) a craftsman’s certificate dated 9 April 1975 showing that he had completed the Carpentry and Joinery Apprenticeship;

c) a credit grade certificate from the NSW Department of Technical and Further Education dated 31 November 1976 in the Building Foreman and Clerk of Works Post-Trade Course;

d) results from the NSW Department of Technical and Further Education dated 31 December 1973 showing that Mr Valstar had completed the Builders Business Special Course;

e) certificate from the NSW Department of Technical and Further Education dated 31 January 1984 showing that Mr Valstar had completed the Local Government Building Inspectors qualifying subjects in accordance with departmental requirement. These were reports and specifications, building practice and regulations, and a Local Government Law subject

17 The Respondent did not accept that these qualifications satisfied the standard, despite being unable to say what TAFE qualifications would do so.

18 The standards determined by the Commissioner are made under the Home Building Act 1989 and are therefore an instrument to which the Interpretation Act 1987 applies: see the definition of instrument in s. 3. In interpreting the standards the principles of interpretation set out in the Interpretation Act 1987 should be followed. As a result the standards will usually be construed according to their ordinary meanings. The question whether a word is to be given its ordinary meaning or some technical or special meaning is a question of law. (See Jedko Game Co Pty Ltd v Collector of Customs (1987) 12 ALD 491; Brutus v Cozens [1973] AC 854.) A construction that will promote the purpose or object underlying the standards is to be preferred to a construction that would not promote that purpose or object: s.33. s.34 of the Interpretation Act 1987 deals with the use of extrinsic evidence in interpreting an Act or statutory rule.

19 In the present context, the issue is what is required of Mr Valstar to prove that he has five years experience in pre-purchase inspection of residential building work evidenced by:

“Being accredited by … TAFE NSW”
There is a distinction made in the standard between a person who is accredited, and a person who undertakes an independent assessment administered by TAFE NSW for the purpose of ascertaining extent of knowledge required in performing pre-purchase inspections. They are not one and the same thing. On the evidence before me TAFE NSW does not offer courses in pre-purchase inspections, but does undertake the assessments referred to by Mr Wilson in the course of his submissions. Those assessments enable an applicant to satisfy the last criteria set out in the standard, by undergoing an independent assessment through TAFE. The standards make it clear that something else is contemplated by, “being accredited.”

20 What then is the meaning of, “Being accredited by TAFE NSW” in the context? The Australian Oxford Dictionary defines accredited thus:

Accredited adj. 1. (of a person or organisation) officially recognised
Bearing in mind that understanding of the meaning of accredited, the issue that then arises is what does an applicant with five years experience in pre-purchase inspections of residential building work evidenced by being accredited by TAFE NSW, have to be accredited by TAFE NSW as or for? In other words, what does an applicant have to be officially recognised by TAFE NSW as? The obvious answer, consistent with the purpose and context of the standard, is as being able to conduct pre-purchase inspections of residential building work. Yet the evidence before me is that TAFE NSW offers no such accreditation. It now does offer independent assessments, but that is clearly not what the standard is referring to when it talks of accreditation. This is so because the standard by the use of the word “OR” before referring to the independent assessments, itself makes a distinction between the two. Indeed this distinction was recognised by the Review Officer on internal review of the decision (see paragraph 4.2 of the decision made on internal review).

21 In the course of the hearing Mr Wilson for the Commissioner cautioned that the Tribunal does not have the power to review the Commissioner’s making of standards: s.32B(4) Home Building Act 1989. I accept that submission, but – as I said in the course of the hearing – am of the view that it is the Tribunal’s duty in considering this appeal to read and interpret the standards so that they have meaning, and then consider the facts at hand to see whether or not they satisfy that meaning. The real difficulty is that the standards are drafted in such a way that by reading them in accordance with the ordinary and plain meaning of the words used, and in the light of the fact that TAFE NSW does not offer accreditation in pre-purchase inspections, they become virtually meaningless.

22 I was not referred to any extrinsic materials which might assist me in the task of ascertaining what the standards mean, and have not been able to locate any in my own research. The decision under appeal does not assist me by explaining how the Commissioner interprets the standards, it merely says that Mr Valstar does not satisfy the standard, without explaining why. Mr Wilson submitted that the Commissioner’s officers understand the standard, and interpret them in accordance with that understanding. It is, I think, worth noting that in the original decision to refuse Mr Valstar’s application for a building consultancy licence, dated 5 April 2004, no mention is made of Mr Valstar’s TAFE qualification or of what is required to satisfy the TAFE NSW accreditation requirement. Relevantly, the decision simply said:

You have not, other than through references from non-qualified person, provided adequate verification (evidence) of your pre-purchase inspection experience.
The review officer did note Mr Valstar’s TAFE qualifications, and relevantly concluded:
The applicant has not provided evidence of being accredited by …TAFE NSW … nor has been recommended by Fair Trading to undertake an assessment by TAFE NSW.
In my opinion it is not at all clear from those reasons that the officers of the Commissioner who made the decisions refusing Mr Valstar’s application had an understanding of what the standard actually requires. They did not refer to the fact that there is no TAFE NSW accreditation for pre-purchase inspections, nor give any explanation as to how the requirements of the standard might be satisfied in those circumstances. In finding that Mr Valstar did not satisfy the requirement, they gave no explanation of the reasoning which led them to that conclusion: reasoning which in the circumstances was required.

23 In Puglisi -v- Director of Fisheries, NSW Fisheries [1999] NSWADT 110 the President of this Tribunal considered what was necessary to satisfy the requirement of s.52 of the Administrative Decisions Tribunal Act 1997 that an administrator give adequate reasons for decision.

10 In assessing the adequacy of reasons, an approach should not be taken which is unduly burdensome on administrators. However, the reasons should be sufficiently precise to enable a reasonable person placed in the position of a disappointed applicant to understand why the negative decision was made. The disappointed applicant needs to be given enough information to enable him or her to understand the reasoning process, and the weight or otherwise given to material considered.

11 A number of Commonwealth cases have dealt with the issue of adequacy, usually in the context of the requirements of s 13(1) of the Administrative Decisions (Judicial Review) Act 1977 (`the ADJR Act'). The Administrative Appeals Tribunal and the Federal Court have held that to be adequate, the reasons given must be intelligible, must deal with substantial issues raised for determination and must expose the reasoning process adopted: see Re Palmer and Minister for the Capital Territory (1978) 1 ALD 193; 23 ALR 196; Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500; ARM Constructions Pty Ltd v DCT (1986) 10 ALN N118; 10 FCR 197; Ansett Transport Industries (Operations) Pty Ltd v Taylor (1987) 18 FCR 498; 12 ALD 547; 73 ALR 193; Hatfield v Health Insurance Commission (1987) 15 FCR 487; 14 ALD 131; 77 ALR 103; Dornan v Riordan (1990) 21 ALD 255; 95 ALR 451.

12 In Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500, Woodward J, said that such a requirement:

" ... requires the decision-maker to explain his decision in a way which will enable a person aggrieved to say in effect: "Even though I may not agree with it, I now understand why the decision was made against me. I am now in a position to decide whether that decision has involved an unwarranted finding of fact, or an error of law, which is worth challenging."

That requires that the decision-maker should set out his understanding of the relevant law, any findings of fact on which his conclusions depend (especially if those facts have been in dispute), and the reasoning processes which led him to those conclusions. He should do so in clear and unambiguous language, not in vague generalities or the formal language of legislation."

13 In Soldatow v Australia Council (1991) 22 ALD 750, Davies J said that the ADJR Act required (at 750-1):
"Section 13 (1) requires proper and adequate reasons which are intelligible, which deal with the substantial issues raised for determination and which expose the reasoning process adopted. The reasons need not be lengthy unless the subject matter requires but they should be sufficient to enable it to be determined whether the decision was made for a proper purpose, whether the decision involved an error of law, whether the decision-maker acted only on relevant considerations and whether the decision-maker left any such consideration out of account."

24 In interpreting the standard the Tribunal must strive to give it meaning. The apparent meaning of this part of the standard, that an applicant must demonstrate accreditation by TAFE NSW in pre-purchase inspections, could be argued to be both absurd and unreasonable when viewed in the light of the fact that TAFE NSW offers no such accreditation. The standard simply cannot be satisfied when construed in that fashion. This is a result that cannot have been intended. It could be argued that the only way in which this part of the standard can be read, so as to give it meaning and effect, is to read it as requiring applicants to be accredited by TAFE NSW with qualifications suitable for those undertaking pre-purchase inspections. That, of course, is a matter concerning which I have no evidence.

25 It is also an interpretation which requires words to be written into the standard in the course of construing it, so as to avoid the difficulties which its plain and ordinary meaning presents. While the reading of words into a statute in such circumstances is not unknown, the authorities point to the dangers of adopting such a course (Thompson v Goold & Co [1910] AC 409 at 410 per Lord Mersey), and the problems which arise in deciding whether the words of a statute are themselves absurd or merely produce what appears to be an absurd result (Higgon v O’Dea [1962] WAR 140 and Bergin v White; Ex parte Bergin [1956] St R Qd 432.) Stephen J in Marshall v Watson (1972) 124 CLR 640 at 649 cautioned:

… Granted that there may seem to be lacking in the legislation powers which it might be thought the Legislature would have done well to include, it is no power of the judicial function to fill gaps disclosed in legislation; as Lord Simonds said in Magor and St. Mellons R.D.C. v. Newport Corporation (1952) AC 189, at p 191, "If a gap is disclosed, the remedy lies in an amending Act" and not in a "usurpation of the legislative function under the thin disguise of interpretation".

26 Bearing that caution in mind, and because – as will be seen below - I have determined that it is not necessary to the resolution of this appeal that a final interpretation be arrived at, I have decided to highlight the difficulties I perceive with the standard, without determining how the words “Being accredited by … TAFE NSW” should be construed. I do so in the hope that those deficiencies will be addressed by the Commissioner.

Professional Indemnity Insurance

27 The regulation of home building consultants under the Home Building Act 1989 is a new phenomenon. S.32A was introduced by the Licensing and Registration (Uniform Procedures) Act 2002, but only commenced operation on 27 August 2004. Despite the Home Building Legislation Amendment Act 2000 containing provisions requiring the licensing of building consultants, those provisions never came into operation. It was the commencement of the 2002 amendments, in August 2004, which compelled Mr Valstar to make his application for a consultants licence. Building consultancy work was unregulated up till then, and those operating as building consultants were not, as a matter of law, required to have professional indemnity insurance.

28 Mr Valstar told the Tribunal that his business had maintained professional indemnity insurance from the time he first started doing pre-purchase inspections (in the period 1985 – 1988) until 1998, when he elected to self-insure. In that period his pre-purchase inspection and building consultancy practice had grown while his actual building work dwindled correspondingly. By 1996 he was undertaking only building consultancy work, with a high emphasis on pre-purchase inspections.

29 Mr Valstar explained the decision to self-insure as an economic one. The legislation as it stood in 1998 did not cover the work he was doing, professional indemnity insurance was expensive, and he thought he could economically meet any claims made against him. Only when the winds of regulatory change indicated that his field of endeavour was likely to be regulated did he again obtain professional indemnity insurance.

30 Mr Valstar produced the following relevant documents in support of his evidence about his professional indemnity insurance history:

a) A letter regarding “K A V Building Services Pty Ltd – Professional Indemnity” and attached premium history from Vero dated 6 September 2004 setting out the premium history for policy number FI 000235 ZF2 for the period 1992 to 1996. The premium history shows that the premiums were paid on the policy during those years and that no claims were made in that time.

b) A certificate of currency from AON Risk Services showing that K A V Building Services Pty Ltd has professional indemnity insurance for the period 7 July 2004 to 7 July 2005 with respect to its professions of “Building and Pre-Purchase Building Inspections Only”.

c) A letter from Wayne Prior of Isis Partnership, Accountants, dated 21 October 2004 to the effect that Mr Prior has been Mr Valstar’s and his company’s account since 1991. Mr Prior says that since 1995 property pre-purchase inspections have been Mr Valstar’s only source of income.

Mr Valstar also produced a bevy of pre-purchase reports as evidence of the work he had been doing over the years.

31 Mr Valstar did not produce copies of the policies relating to this insurance. In cross-examination he agreed that he had not asked for them, believing the premium history sufficient. He argued that the documents produced verified his evidence that he had held professional indemnity insurance for more than 5 years without claims and that he therefore met one of the alternate criteria set out in the standard, namely he had:

“… five years experience in pre-purchase inspection of residential building work evidenced by:
Providing evidence of having Professional Indemnity Insurance with a 5 year no claims history covering pre-purchase inspections”

32 Mr Wilson, for the Commissioner, submitted that Mr Valstar did not satisfy this part of the standard. In so submitting, he argued that the standard should be read as if it read:

“… five years experience in pre-purchase inspection of residential building work evidenced by:

Providing evidence of having Professional Indemnity Insurance with a 5 year no claims history covering pre-purchase inspections in the preceding five years .”
Mr Wilson said that this qualification should be read into the standard as requiring an insurance history for other than the five years immediately preceding the application would not make sense. He submitted that any other period of insurance would be irrelevant.

33 I do not accept this submission. The first requirement of the standard for “five years experience in pre-purchase inspections” carries no requirement that the experience have been obtained in the five years preceding the application. Importing such a restriction into the second requirement, that the experience be evidenced by, “ having Professional Indemnity Insurance with a 5 year no claims history covering pre-purchase inspections”, would be at odds with that provision. Nor does the alternate requirement – discussed above – that the five years experience be evidence by accreditation contain any time limit on that accreditation. Unlike the situation with the accreditation issue, the meaning of the insurance requirements is plain; the language is clear and unambiguous. There is no reason to read the words “in the preceding five years” into the standard. In my view the standard requires exactly what it says, “evidence of having Professional Indemnity Insurance with a 5 year no claims history covering pre-purchase inspections”.

34 Mr Wilson’s next submission was that I could not be satisfied on the evidence before me that Mr Valstar had demonstrated such a history. While he conceded that the Vero letter and premium history show a 5 year history of professional indemnity insurance with no claims, he submitted that it was not sufficient to prove that the insurance covered pre-purchase inspections. Only production of the relevant policies would do so. I pointed Mr Wilson to Mr Valstar’s evidence concerning his insurance, and the documents he had produced in support of his evidence about that insurance. Mr Wilson submitted that “proper, solid evidence” is required before I could be satisfied that Mr Valstar satisfied the standard.

35 Section 73(2) and (3) pf the Administrative Decisions Tribunal Act 1997 provide that:

(2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any such matter as it thinks fit, subject to the rules of natural justice.

(3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

In United Bonded Fabrics Pty Ltd v Roseman [2000] NSWADTAP 13 the Appeal Panel discussed the operation of s.72(2). It noted that the provision is a counterpart of s 33(1) of the Administrative Appeals Tribunal Act 1975 (Cth), although that provision does not contain the natural justice exception. Citing Ileris and Comcare [1999] AATA 647 the Appeal panel observed that:
“A provision which allows a tribunal to disregard the formal rules of evidence dispenses with the need for material to meet strict criteria of admissibility before it becomes evidence in the proceedings. The material must nonetheless be relevant to the issues in the proceedings in the sense that it is capable of establishing the existence or non-existence of relevant facts. Shulver v Sherry (1992) 28 ALD 570; Casey v Repatriation Commission (1995) 39 ALD 34.”

36 In my opinion while production of the insurance policies upon which Mr Valstar relies would undoubtedly be the best evidence of the nature of the professional indemnity insurance he held from 1992 to 1996 inclusive, there is sufficient evidence which, while not the best evidence, enables me to be comfortably satisfied that Mr Valstar’s professional indemnity insurance during that five year period covered pre-purchase inspections. That evidence includes Mr Valstar’s uncontradicted sworn evidence that the insurance he had in that period covered pre-purchase inspection work, his evidence that this was the majority of his work, and his accountant’s statement that from 1995 the company’s only source of income was pre-purchase inspections. I have no reasons to doubt the truthfulness of Mr Valstar’s evidence in this regard. It also strikes me as highly improbable that Mr Valstar would have maintained professional indemnity insurance in relation to activities from which he was not earning income in 1995 and 1996. To follow the path suggested by Mr Wilson and reject all that evidence, as it is not the best evidence, would, in my view, be contrary to equity, good conscience and the substantial merits of the case, especially in the light of the fact that Mr Valstar is unrepresented. Indeed technicalities and legal form would hold sway were that to occur.

37 As a result I am satisfied that Mr Valstar has adduced evidence of having professional indemnity insurance with a 5 year no claims history covering pre-purchase inspections. While not strictly relevant to a determination in accordance with the standard, he has also demonstrated significant experience in pre-purchase inspections of 15 years or more. I find that he satisfied the criteria relating to experience as evidenced by professional indemnity insurance contained in the standard.

Conclusion

38 In summary I am satisfied that Mr Valstar satisfies the requirement of the standard that he:

“Have five years experience in pre-purchase inspection of residential building work evidenced by:

Providing evidence of having Professional Indemnity Insurance with a 5 year no claims history covering pre-purchase inspections.”

As a consequence I intend to set aside the decision to refuse Mr Valstar an individual building consultancy licence. I consider that the correct and preferable decision is to substitute that decision with a decision that a building consultant’s licence (pre-purchase inspections) be issued to Mr Valstar subject to the applicable conditions contained in Division 2 of Part 4 of the Home Building Regulation 2004.

39 I find it unnecessary to determine whether Mr Valstar satisfies the requirement of the standard that he:

Have five years experience in pre-purchase inspection of residential building work evidenced by:

Being accredited by … TAFE NSW:”

In so doing, I draw the Commissioner’s attention to the difficulties I have encountered in trying to understand what this part of the standard requires, and recommend that the drafting of the standard be revisited.

40 The decision of the Commissioner made 23 August 2004 to refuse Mr Valstar a building consultants licence (pre-purchase inspections) is set aside and substituted with a decision that a building consultants licence (pre-purchase inspections) be issued to Mr Valstar subject to the applicable conditions contained in Division 2 of Part 4 of the Home Building Regulation 2004.