Burke v Director General, Department of Transport [2001] NSWADT 179 (1 November 2001)

Last Updated: 6 November 2001

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL GENERAL DIVISION

CITATION: Burke -v- Director General, Department of Transport [2001] NSWADT 179

PARTIES: APPLICANT

Glenn Anthony Burke

RESPONDENT

Director General, Department of Transport

FILE NUMBERS: 013096

HEARING DATES: 05/07/2001, 16/08/2001

SUBMISSIONS CLOSED: 16/08/2001

DECISION DATE: 01/11/2001

BEFORE: Fleming G - Judicial Member

LEGISLATION CITED: Administrative Decisions Tribunal Act 1997

Home Building Act 1989

Home Building Regulation 1997

CASES CITED: Australian Broadcasting Tribunal -v- Bond and Ors [1990] HCA 33; (1990) 170 CLR 321

Hughes & Vale Pty Ltd -v- NSW (No 2) [1955] HCA 28; (1955) 93 CLR 127

NSW Commercial Tribunal in the matter of Maurice Neville Hinchcliffe -v- Building Services Corporation (24 July1997)

APPLICATION: Home Builder - issue of supervisor or registration certificate

Home Building Act - home builder - alteration of supervisor or registration certificate

MATTER FOR DECISION: Principal matter

APPLICANT REPRESENTATIVE: APPLICANT

In person

RESPONDENT REPRESENTATIVE: RESPONDENT

A Wilson, solicitor

ORDERS: Decision of the Director General is affirmed.

Reasons for Decision:

THE APPLICATION

1 On 21 June 2001 Mr Glenn Burke lodged an application with the Tribunal for review of a decision to refuse his application to for a Qualified Supervisor Certificate (`certificate') under the Home Building Act 1989 (`the Act'). The decision was made by the Director General, Department of Fair Trading.

DECISION UNDER REVIEW

2 Mr Burke had applied for the certificate on 24 February 2001. On 9 March 2001 the application was refused on the ground that Mr Burke was not a fit and proper person to hold such a certificate. Notification of the decision stated that:

In reaching this decision matters including your involvement with the company Reef Pools (NSW) Pty Ltd have been taken into consideration. The Department in its investigations has determined that you were a director of that company from June 1996-April 1999 and for considerable period of time you were involved with duties in the management of the company prior to the appointment of a liquidator on 21 October 1999.

. .

It is also noted that in response to question 9 of your present application which asks whether you, or any partnership or company of which your were a member of director ever been (sic) refused or disqualified from holding a licence, authority, certificate or registration or had any such instrument cancelled or suspended, you answered `no'. You have in fact bee the applicant in respect to refused applications for a certificate and directly involved with a company that has been refused a licence and a company that has had a licence cancelled.

3 The decision to refuse to issue the certificate was affirmed on internal review on 12 April 2001. It relied upon the same reasons. The Tribunal's jurisdiction to review the decision derives from sections 83B of the Act and 38 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act)

4 In his application to the Tribunal for review of the decision Mr Burke stated that the ". . the decision to refuse my application was made using inaccurate information. Mr Smith has refused to grant me the opportunity to present myself, to deny false allegations made against me. My circumstances have changed as I am now married".

5 The Director General submits that the Tribunal does not have jurisdiction to hear Mr Burke's application. A short hearing was held on 7 September 2001 and the Director General made written and oral submissions on jurisdiction. Mr Burke was given time to file written submissions on the issue of jurisdiction, which he did. The Tribunal has proceeded to determine the issue of jurisdiction ` on the papers' pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.

THE RELEVANT LAW

6 Section 24 of the Act provides that:

(1) An individual may apply to the Director-General for a certificate that the individual is qualified to do, and to supervise:

(a) residential building work, or

(b) specialist work of a specified kind.

(2) ....

(3) An application for a certificate is to be accompanied by such particulars as are required by the Director- General concerning:

(a) the fitness and ability of the applicant to do the work and any supervision for which the certificate is required, and

(b) any relevant qualifications held by, relevant experience of, and appropriate training that has been or is being undertaken by, the applicant.

7 Section 25 of the Act states:

(1) After considering an application, the Director-General must:

(a) issue a qualified supervisor certificate or a certificate of registration to the applicant, or

(b) reject the application by serving on the applicant a notice setting out the reasons for rejecting the application.

(2) The regulations may specify or provide for the Director-General to determine qualifications that must be held or other requirements that must be met before any supervisor or registration certificate is issued or before such a certificate of a particular kind is issued.

(3) The Director-General must reject an application for a supervisor or registration certificate:

(a) if the Director-General is not satisfied that any such requirement would be met were the certificate to be issued, or

(b) if the applicant has not completed, at a standard acceptable to the Director-General, any relevant examination or practical test (or both) conducted or nominated by the Director-General and required by the Director-General to be completed by the applicant.

8 Section 34 of the Act states:

(1) An application for an authority, or for the variation, renewal or restoration of an authority, is to be:

(a) made in a form approved by the Director-General, and

(b) lodged personally or by post at an office of the Department of Fair Trading, accompanied by the prescribed fee.

(2) A person must not, in or in connection with an application for an authority, or for the variation, renewal or restoration of an authority:

(a) make any statement, or

(b) supply any document, knowing it to be false or misleading in a material particular. Maximum penalty: 10 penalty units.

9 Clause 20 of the Home Building Regulation 1997 (the Regulation) provides:

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

(a) is of or above the age of 18, and

(b) is not an apprentice or trainee within the meaning of the Industrial and Commercial Training Act 1989, and

(c) is a fit and proper person, and

(d) has such qualifications or has passed such examinations or practical tests, or both, as the Director-General determines to be necessary to fit the applicant to do, or to supervise, the work for which the certificate is required, and

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

(f) is capable of doing or supervising work for which the certificate is required, and

(g) is not disqualified from holding a certificate or a certificate of a particular kind, and

(h) is not the holder of a certificate that is suspended. SFD

10 Section 25(2) of the Act provides that the Director-General may determine standards or other requirements that must be met before any certificate is issued. Clause 20 of the Regulation sets out such requirements. Section 25(3)(a) provides that an application for a supervisor or registration certificate must be rejected `if the Director-General is not satisfied that any such requirement would be met were the certificate to be issued'. One of the requirements is that an applicant be `fit and proper' (cl 20 (c)). There is no statutory definition or express guidance in the Act as to how a person may meet or fail to meet this requirement. There are several High Court decisions, however, which provide considerable guidance as to how the term and requirement is to be interpreted in the context of assessing applications for licences and such.

11 In the matter of Australian Broadcasting Tribunal -v- Bond and Ors [1990] HCA 33; (1990) 170 CLR 321, the High Court was of the view that where there is a legislative requirement to be 'fit and proper' in relation to a licence of some kind ". . .the requirement takes its meaning from the activities which the person is or will be authorised to engage in by virtue of the licence and the ends to be served by those activities" and that ". . .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" (at 380). The Court considered that ". . . the question whether a person is fit and proper is one of value judgment and in that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker" (at para 63).

12 The Director-General submitted that fitness and propriety to hold a Qualified Supervisor Certificate requires the applicant to have the three characteristics of honesty, knowledge and ability (Hughes & Vale Pty Ltd -v- NSW (No 2) [1955] HCA 28; (1955) 93 CLR 127). The Tribunal accepts this submission.

EVIDENCE

13 The Tribunal held a hearing in this matter over two days. The Applicant gave oral evidence and a written submission. He also relied on documents in support of the application that had been sent to the Department of Fair Trading including a number of character references. A large amount of documentary material was filed by the Director General. This included the following:

· Copy of the Departmental file in relation to Mr Burke.

· Affidavit of Geoffrey Heise, Technical Investigator, Department of Fair Trading and attached report of Christopher Wykes, liquidator of Reef Pools Pty Ltd.

· Copy of numerous complaint files generated by the Department of Fair Trading in response to complaints against Reef Pools Pty Ltd.

· Copies of `licensing' files in relation to Australian Commercial Pools Pty Ltd and Reef Pools Pty Ltd.

· Copies of files that relate to Mr Ken Burke, the Applicant's father and co-director for a time of Reef Pools Pty Ltd.

14 The evidence is extensive and it is not possible to set it out in full here. All of the above documents were considered by the Tribunal. Set out below is a summary of the evidence in relation to each of the grounds for refusal of the application for a `Qualified Supervisor Certificate'.

Failure to Disclose Previous Refusal

15 Among other things the Director General relies upon a number of responses provided by Mr Burke in his application form to support a finding that Mr Burke does not possess the honesty required to hold a certificate under the Act. These responses are, in summary, as follows:

· Different dates and employment records are described in each of the applications lodged by Mr Burke on 1 April 1992, 15 September 2000 and 24 February 2001,

· Answer to question nine on application of 24 February 2001 incorrectly records `no' in answer to the question whether Mr Burke has ever been refused or previously disqualified from holding a certificate.

16 Mr Burke told the Tribunal that he had no intention to deceive the Department in answers provided in his applications. In relation to his work experience he said that he filled the form in from memory. He said the he was known to the Department and expected that each of his applications would be closely scrutinised. The incorrect answer to question nine was a simple error of no consequence as he knew that the Department was well aware of his previous applications and involvement in Reef Pools. His work record was he said, accurate, although his roles may have been differently described in each application.

Involvement in Reef Pools Pty Ltd

17 Mr Burke was a director of Reef Pools Pty Ltd (`Reef Pools') from September 1996 until April 1999. He was also a director of his own company Bakro Holdings Pty Limited. Reef Pools went into liquidation on 14 November 2000. The liquidator, Christopher Wykes, reported to creditors on 5 December 2000. This report states, among other things, that at the time the company was placed into liquidation it had an estimated funds deficiency of $309,657.01. The liquidator conducted a public examination of Glen and Ken Burke and stated as follows in his report:

"Glenn Burke was a director Reef up to 12 April 1999. After that date, he became a consultant to Reef. However, Glenn Burke admitted that he retained all his former functions and roles except for representing Reef before the Fair Trading Tribunal. This would indicate that he retained the responsibilities of a director of Reef despite his formal resignation,

Glenn Burke intended to set up his own pool business after his resignation as director from Reef.

Glenn Burke did not have adequate cash flow management expertise and exercised inadequate control over the cash flow of Reef. Glenn Burke also agreed that the cash flow problems of Reef escalated as the business expanded.

Glenn Burke agreed that substantial sums of money were paid by Reef to Bakro about one month before the appointment of an administrator to Reef. Bakro is now deregistered and Glenn Burke no longer works in the pool industry.

Glenn Burke was warned for prevarication when he alleged that Reef had an unlimited bank overdraft without security that was "never required to be paid back".

18 The Director General submitted that `ability' in relation to fitness to hold a certificate under the Home Building Act 1989 ". . .encompasses more than just completing building work. The Home Building Act is protective jurisdiction (sic) and therefore it deals with the way the Applicant deals with and/or treats customers and as a Director of Reef Pools ensures (sic) the work is carried out in a proper manner within appropriate times". The Director General points to the following conduct of Mr Burke as documented in three volumes of consumer `complaint' files in evidence:

· When Mr Burke was a director of Reef Pools the company misrepresented on its letterhead that it was a member of the Swimming Pool and Spa Association of Australia (SPASA) when that organisation had rejected its application for membership.

· Complaint of Crystal Pools Pty Ltd about the conduct of Glenn Burke as a salesman for Reef Pools was upheld by SPASA and Reef Pools was fined $2000.00.

· Mr Burke's involvement in Reef Pools from April 1999- November 1999 when it went into liquidation.

· Mr Burke's involvement as a director (until April 1999) and salesperson for Reef Pools between June 1996 and October 1999 when 29 complaints were received about the company by the Department of Fair Trading. Of these complaints 12 were investigated, 17 were not pursued by the complainants. In addition one complaint let to a claim on the statutory insurance scheme.

19 The Director General submitted that the lack of prosecutions in relation to complaints was a result of the fact that the company went into liquidation and was no longer trading. In effect it was argued that no further action was necessary. Complainants were advised to make a claim on the statutory insurance scheme wherever that was possible and they wished to pursue the matter. The complaint files in evidence run to several volumes of material. As noted above they have been carefully considered by the Tribunal. In summary the complaints disclose a pattern of alleged behaviour on the part of Reef Pools and Ken and Glenn Burke, its directors. The behaviour complained about poor quality of building work (Curtis) includes failure to respond to customer complaints (Williams, Abdulla), defective building work (Williams, Phillips, Waller), rude and harsh treatment of customers (Howell), failure to carry out work in a timely manner(Rizzo, Waller), failure to rectify defective building work (Rizzo, Abdulla, Lehn ), failure to properly supervise building work (Logue), making of misrepresentations to customers as to the quality and type of pools to be provided (Waller, Addamo, Humphries ) and failure to address customers general concern about progress of the work (Logue, Beadle).

20 Mr Burke told the Tribunal that he was not involved with Reef Pools after he ceased to be a director in April 1999. He said that he was subcontracting work through his own company Bakro and spent a period of time in Menindee in the far west of NSW. After his resignation from Reef he no longer had responsibility for co-ordinating sales teams or making executive decisions. However he did some work to help his father in the company. The Director General submitted copies of correspondence on Reef Pools letterhead during the period April 1999-October 1999 that were signed by Glenn Burke.

21 Mr Burke pointed to the lack of substantiation of many of the complaints made to the Department about Reef Pools. Those complaints, he said, also represented a very only approximately one percent of the pools completed by Reef Pools over a number of years. The company sold up to 50 pools per month. He points to the fact (undisputed) that none of the complaints made to the Department resulted in a prosecution. Mr Burke submitted that Reef Pools was in a strong financial position when it was sold to Blue Haven Pools.. He claimed that Reef Pools had an excellent reputation in the industry and had won 3 individual awards in the SPASA Pool, of the Year Competition. He said that Reef Pools worked to such a high standard that it was sought after by `Sydney's number one builder'.

22 Mr Burke gave oral evidence in response to each of the complaints contained in the files produced by the Director General. He denied any wrongdoing in the complaints.

23 Mr Burke denies any wrongdoing or personal responsibility for the liquidation of Reef Pools. No legal action has been taken against himself or his father following the liquidation of the company. He told the Tribunal that he had very good relations with customers through Reef Pools and his own company. Most of the problems raised by consumers he was able to amicably resolve. Mr Burke told the Tribunal that the imposition of a fine by SPASA was common in the industry and not an indication that he was not fit to hold a certificate or to work in the industry.

24 Mr Burke told the Tribunal that he had been through a very difficult time in his personal life in 1999-2000. His mother died and his marriage broke down. He was now much more stable and wanted to re-enter the swimming pool industry. when Reef Pools. He has spent his entire working life in this industry and wants to use the skills and experience he has accumulated. He told the Tribunal that there is no substance to any claim of dishonesty against him and that the complaints made are not of this kind. He said he had good relations with his customers and always attempt to resolve problems as they arose.

FINDINGS AND REASONS

Fitness and Propriety to Hold a Qualified Supervisor Certificate under the Home Building Act 1989.

25 The question of whether a person is fit to hold a licence or certificate is linked to the authority that is imposed with that licence. The holding of a Qualified Supervisor Certificate under the Home Building Act 1989 may be taken as evidence `. . that a person can be held out to the public as being not only possessed of acceptable building expertise but is a person of integrity and honesty' (decision of the NSW Commercial Tribunal in the matter of Maurice Neville Hinchcliffe -v- Building Services Corporation (24 July1997)). Two issues have been relied upon for the refusal to restore the license. The findings on these issues are set out below.

Failure to Disclose Previous Refusal

26 There are clearly differences in the recording of Mr Burke's work record in each of his application. It is also not in dispute that his answer to question nine of the application that is the subject of this appeal is incorrect. The Director General points to this as evidence of dishonesty on Mr Burke's behalf. I am not satisfied that Mr Burke intended any dishonesty in his answers on the application forms. I accept his evidence that he was well known to the Department and expected his application to be scrutinised. His completion of the forms appears to me to reflect a sloppy and cavalier attitude to the need to fully and accurately complete the forms rather than any conscious purpose to deceive the Department. If anything I find that it goes to his ability to conduct business under the auspice of a qualified supervisor certificate under the Home Building Act 1989. Ultimately however this aspect of his conduct is less significant to the question of whether he is a fit and proper person to hold a certificate that is his conduct in relation to Reef Pools Pty Ltd. This is discussed further below.

Involvement in Reef Pools Pty Ltd

27 Reef Pools Pty Ltd was essentially a family company operated by Mr Burke and his father. They made the day to day decisions about the business and dealt with the public to arrange sales and pool building. I am satisfied that Mr Burke continued to represent Reef Pools after his resignation as a Director in April 1999 and before the company went into liquidation in October 1999. I note that this was also the finding of the liquidator after public examination of Mr Burke.

28 I have carefully considered the evidence contained in the complaint files against Reef Pools submitted by the Director General and Mr Burke's responses to them. I accept that many of these complaints did not result in prosecution for offences under the Home Building Act 1989 nor in claims on the statutory insurance fund. This in itself may not be significant in that the Director General clearly determined that it would be a waste of public money to pursue Mr Burke when the company complained of no longer traded and any further issue of a licence to the directors of the company would require his approval. However the difficulty facing the Tribunal is that the complaints were not investigated to the point where a finding of any wrongdoing was made by the Director General. They were not fully tested as to their truth or seriousness. At the same time it is not practical or desirable to call all of these complainants to give evidence to this Tribunal. The complaints are now over two years old. Officers of the Department of Fair Trading have, in numerous reports in evidence, concluded that although the complaints were many in number the defective work complained about was `considered of a `minor' nature that may be covered by an insurance claim (see pages 305-30 of the Director Generals evidence). The `complaint' evidence discloses a pattern of behaviour and business conduct not only of Mr Glenn Burke but of his father Ken Burke and of employees of Reef Pools. Mr Burke has had the opportunity to reply to the complaints in his sworn evidence before this Tribunal.

29 I have carefully considered whether the `complaint evidence' reflects on Mr Burke's knowledge, honesty, ability in relation to the holding of a qualified supervisor certificate. I am satisfied that Mr Burke has a great deal of knowledge of the swimming pool industry. It has been virtually his `life's work'. He has been involved with his father in the family company and has experience in the negotiation of swimming pool sales, contracts, industry standards and practices. He passed the technical exam required for the grant of a qualified supervisor certificate in relation to pool building 1999. The complaints of defective work in relation to pools constructed by Reef Pools were mainly of a `minor' nature and were comparatively small in number when compared to the volume of trade undertaken by the company.

30 However Mr Burke's involvement in the financial management of Reef Pools, as recorded in the liquidators report, reflected an inexperience and inability to understand and control the financial affairs of the company. The holder of a qualified supervisor certificate, in running a business in the building industry and dealing with large sums of customers money, requires a level of basic financial management ability that I am not satisfied Mr Burke possesses.

31 On balance, I am also not satisfied that Mr Burke has been honest in his dealings with past customers, in his applications to the Director General and in his evidence to the Tribunal. In particular, as referred to above, I am not satisfied that Mr Burke was honest in his evidence of his involvement with Reef Pools between April and October 1999. The report of the liquidator of Reef Pools raises a number of issues as to Mr Burke's honesty in relation to the transfer of monies prior to his company Bakro prior to the liquidation of Reef Pools. Nor am I satisfied that Mr Burke acted honestly as a director of Reef Pools in allowing the company to continue to represent itself as a member of the industry association SPASA.

32 The `complaints evidence' consistently raises issues about Mr Burke's honesty and ability in dealing with the public in the negotiation of swimming pool contracts, the supervision of the construction of swimming pools and attention to following up complaints of unfinished and defective work. In his evidence to the Tribunal Mr Burke did not appear to accept the seriousness or genuineness of the complaints evidence. I am satisfied that the totality of the complaints undermine Mr Burke's claims to the requisite honesty and ability to hold a qualified supervisor certificate. His evidence in the face of all of these complaints was largely dismissive of consumer concerns and of any wrongdoing on his part in his dealings with those concerned. I am not satisfied that the general community could have confidence that Mr Burke would conduct himself in a way that was consistent with the authority conferred on him by the issue of a qualified supervisors certificate under the Home Building Act 1989. That Act is consumer protection legislation designed to ensure that persons who operated under licence in the residential building industry do so to the highest standards.

33 Having taken all the evidence into account and having considered the purpose for which a qualified supervisor certificate is held under the Home Building Act 1989, I am not satisfied that Mr Burke is a `fit and proper person' to hold such a licence. Therefore the decision of the Director General must be affirmed.