Havenview Homes Pty Ltd & Furci v Director General, Department of Fair Trading [2004] NSWADT 219 (1 October 2004)

Last Updated: 1 October 2004

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL GENERAL DIVISION

CITATION: Havenview Homes Pty Ltd & Furci v Director General, Department of Fair Trading [2004] NSWADT 219


PARTIES: APPLICANTS
Havenview Homes Pty Ltd & Patrick John Furci
RESPONDENT
Director General, Department of Fair Trading



FILE NUMBERS: 033021
033023

HEARING DATES: 07/04/2003, 19/05/2003, 12/08/2003, 08/12/2003

SUBMISSIONS CLOSED: 18/06/2003



DECISION DATE: 01/10/2004

BEFORE: Montgomery S - Judicial Member





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

CASES CITED: Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Fhagenblat v Feingold Partners Pty Ltd (2001) VSC 454
Furci & Ors -v- Director General, Department of Fair Trading [2003] NSWADT 53
Commissioner of Fair Trading v Harb & Anor [GD] [2004] NSWADTAP 17
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305

APPLICATION: Home builder - cancellation of contractor licence
Home Building Act - home builder - cancellation of contractor licence

MATTER FOR DECISION: Principal Matter


APPLICANT REPRESENTATIVE: APPLICANT
F Clark, Barrister

RESPONDENT REPRESENTATIVE: RESPONDENT
A Grey, Solicitor

ORDERS: 1. The determinations of the Director-General, Department of Fair Trading in relation to the contractor licence held by Havenview Homes Pty Ltd, and the contractor licence held by Mr Patrick Furci are set aside
2. I substitute for those determinations the decisions that the licences are to be reinstated subject to the conditions of the stay imposed on each of those licences by Judicial Member Higgins on 31 January 2003. Those conditions are to remain in place until 31 January 2005


Reasons for Decision:

1 On 28 August 2002 the Director-General of the Department of Fair Trading ("the Director-General") issued a Notice to Show Cause to each of Patrick John Furci and Havenview Homes Pty Ltd ("the Applicants") under section 61 of the Home Building Act 1989 ("the Act"). The Applicants provided written submissions in response to the Notice to Show Cause. On 19 November 2002 a delegate of the Director-General, Mr Christopher Hanlon, Director Compliance and Standards with what was then the Department of Fair Trading ("the Department"), made the following determinations under section 62 of the Act:

"1. In the case of Havenview Homes Pty Ltd, any contractor licence held by it is to be cancelled and it is disqualified for a period of two years from being:

(a) the holder of any authority,

(b) 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,

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

Such period of disqualification is to take effect on and from 28 November 2002.

2. In the case of Mr Patrick Furci, any contractor licence held by him is to be cancelled and he is disqualified for a period of two years from being:

(a) the holder of any authority,

(b) 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,

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

Such period of disqualification is to take effect on and from 28 November 2002.

Additionally Mr Patrick Furci must also pay, as a penalty to the Director- General the amount of $4,000.00 within 28 days of the date of this determination."

2 On 13 December 2002, the Applicants applied for an internal review of the Director-General’s decisions. On 24 January 2003 the Applicants filed an application with the Tribunal for an external review of the Director-General’s decisions and for a stay of those decisions.

3 On 31 January 2003 Judicial Member Higgins granted a stay of the Director-General’s decisions. Her reasons are recorded in Furci & Ors -v- Director General, Department of Fair Trading [2003] NSWADT 53. In summary, the stays were made subject to the following conditions:

1. Mr Furci is not to enter into contracts under his personal licence.

2. Havenview Homes Pty Ltd is to provide evidence of insurance eligibility, and if provided, the company is restricted to entering into one contract at a time in respect of one dwelling only.

Applicable legislation

4 Conferral of jurisdiction on the Tribunal to review a reviewable decision is set out in section 38 of the Administrative Decisions Tribunal Act, 1997 ("the ADT Act"). Insofar as is relevant, that section provides as follows:

"38 Conferral of jurisdiction to review reviewable decisions

(1) Conferral of review jurisdiction The Tribunal has jurisdiction under an enactment to review a decision (or a class of decisions) if the enactment provides that applications may be made to it for a review of any such decision (or class of decisions) made by an administrator:

(a) in the exercise of functions conferred or imposed by or under the enactment, or

(b) in the exercise of any other functions of the administrator identified by the enactment.

5 Section 5 of the ADT Act defines the term "enactment" to mean in relation to a "reviewable decision" an Act (other than the ADT Act) or a statutory rule (other than a statutory rule made under the ADT Act).

6 Insofar as is relevant, section 53 of the ADT Act provides:

"53 Internal reviews

...

(9) When an internal review is finalised

An internal review is taken to be finalised if:

(a) the applicant is notified of the outcome of the review under subsection (6), or

(b) the applicant is not notified of the outcome of the review within 21 days after the application for the review is lodged (or such other period as the administrator and person agree on).

Note: Section 55 provides that an interested person may apply for a review of a reviewable decision once an internal review of the decision is taken to be finalised under this subsection.

7 Insofar as is relevant, section 55 of the ADT Act provides:

"55 When can an application for a review be made?

(1) A person may apply to the Tribunal for a review of a reviewable decision only if:

(a) the application is made by an interested person, and

(b) an internal review is taken to have been finalised under section 53 (9), and

(c) the application is made in the manner prescribed by the rules of the Tribunal, and

(d) the application is made within such period as may be prescribed by the rules of the Tribunal following the date on which the internal review is taken to have been finalised under section 53 (9).

Note: Section 4 defines interested person to mean a person who is entitled under an enactment to make an application to the Tribunal for an original decision or a review of a reviewable decision (as the case may be).

(2) However, subsection (1) (b) or (d) does not prevent a person from making an application in respect of a reviewable decision that has not been the subject of an internal review under section 53 if the Tribunal is satisfied that:

(a) the person was not at any time entitled to apply for an internal review of the decision, or

(b) the person made a late application for an internal review in circumstances where the person dealing with the application unreasonably refused to consider the application and the application to the Tribunal was made within a reasonable time following the decision of the administrator concerned, or

(c) it is necessary for the Tribunal to deal with the application in order to protect the person’s interests and the application to the Tribunal was made within a reasonable time following the decision of the administrator concerned."

8 Sections 61 and 62 of the Act provide:

"61 Notice to show cause

(1) This section applies if the Director-General is of the opinion that there are reasonable grounds for believing that there are grounds for taking disciplinary action under section 62 against the holder of an authority.

(2) The Director-General may serve a notice in writing on the holder of an authority, inviting the holder to show cause why he, she or it should not be dealt with under this Division.

(3) The notice must state the grounds on which the holder is required to show cause and must specify the period, being at least 14 days, during which it must be done.

(4) A holder of an authority on whom a notice to show cause has been served may, within the period specified in the notice, make submissions to the Director-General, orally or in writing, and provide evidence with respect to the matters to which the notice relates.

(5) The Director-General may conduct any inquiry or make any investigation in relation to the matters to which the notice relates and the submissions made, if any, and the evidence adduced, if any, by or on behalf of the holder of the authority in relation to those matters that the Director-General thinks fit.

(6) However, such inquiry or investigation need not be conducted if the Director-General is of the opinion that it is in the public interest to take immediate action.

(7) If any submissions are made by a person in accordance with this section, the Director-General must, before determining whether or not to take disciplinary action under this Division, take those submissions into consideration.

(8) If a show cause notice is served under this section on:

(a) a member of a partnership, or

(b) an officer of a corporation that is a member of a partnership, or

(c) an officer of a corporation,

being a partnership or corporation that is the holder of an authority, the other members of the partnership are, or the corporation is, also to be served with a copy of the notice, if it is practicable for the members or corporation to be so served.

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 $22,000 (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:

(i) the holder of any authority, or any specified kind of authority,

(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."

9 Part 4A of the Act provides for review of decisions made pursuant to the Act by the Tribunal. So far as is relevant, section 83B of the HB Act provides as follows:

"83B Reviews by Tribunal

(1) An applicant for the issue or alteration of an authority aggrieved by any decision of the Director-General relating to the application may apply to the Tribunal for a review of the decision.

(2) The holder of an authority aggrieved by any decision of the Director-General to alter an authority or to cancel a provisional authority may apply to the Tribunal for a review of the decision.

(2A) The holder of a licence aggrieved by a decision of the Director-General to suspend the licence under section 22A or 22B may apply to the Tribunal for a review of the decision.

(3) A person aggrieved:

(a) by a decision made by the Director-General under Part 4 (Disciplinary proceedings) to impose a penalty or to cancel or suspend a contractor licence, or

(b) by any other decision made by the Director-General under that Part that is prescribed by the regulations,

may apply to the Tribunal for a review of that decision."

10 Section 83A of the Act defines the term "authority" for the purposes of section 83B. This definition includes a licence.

11 Clause 58A into the Home Building Regulation 1990 ("the Regulation") provides:

"58A Review by Administrative Decisions Tribunal

(1) For the purposes of section 83B(3)(b) of the Act, the following decisions of the Director-General under Part 4 of the Act are prescribed:

(a) a decision to vary an authority by imposing a condition on the authority,

(b) a decision to suspend an authority (other than a contractor licence),

(c) a decision to cancel an authority (other than a contractor licence),

(d) a decision to disqualify the holder of an authority from being:

(i) the holder of an authority, or

(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, or

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

Note: Section 83B (3) (a) of the Act provides for review by the Administrative Decisions Tribunal of a decision to impose a penalty or to cancel or suspend a contractor licence.

(2) In this clause, authority has the same meaning as it has in section 55 of the Act.

(3) Subclause (1) extends to any such decision made before the commencement of the subclause (but not before the commencement of section 83B (3) of the Act as substituted by the Home Building Legislation Amendment Act 2001)."

12 As noted above, the Applicants applied for an internal review of the Director-General’s decisions on 13 December 2002. At the time of the time of the application to the Tribunal on 24 January 2003 there had been no determination of the internal review application. Therefore, pursuant to section 53(9) of the ADT Act the internal review of the Director-General’s decisions is taken to be finalised. Accordingly, the Tribunal has jurisdiction to hear and determine the application for review.

The Notice to Show Cause

13 The Notice to Show Cause contained various allegations of "improper conduct" as defined by the Act. It was concerned with the Applicants’ conduct arising out of two contracts: (a) a contract entered on 3 October 1999 to construct a dwelling at Lot 80 Charlton Place, Menai ("the Pattey contract"); and (b) a contract entered on 3 November 1999 to construct a dwelling at 32 Parkwood Drive Menai ("the Nicholl contract").

14 The Pattey contract is the subject of proceedings before the Consumer, Trader and Tenancy Tribunal of New South Wales ("the CTTT") in which orders made against Havenview Homes Pty Ltd ("the Company") are being challenged. Those proceedings are not yet finalised.

15 In summary the allegations for both complaints involve the following:

(i) Breach of the Act - failure to insure.

(ii) Breach of statutory warranty - failure to complete work in time.

(iii) Breach of statutory warranty - work not done in accordance with law ie. the weatherproofing requirements of the Building Code of Australia.

(iv) Breach of statutory warranty - work not done in a proper and workmanlike manner or in accordance with the plans and specifications.

16 Mr Hanlon’s reasons for the 19 November 2002 decisions detail the allegations and his views in relation to those allegations. In part those reasons stated:

"Conduct

The Department investigated two separate complaints made against the company. The investigation's findings are summarised as follows: -

Home warranty insurance - between October to November 1999 the company entered into two separate contracts which required it to effect home warranty insurance coverage for its work. According to Mr Furci, when interviewed by investigators on 29 July 2002, the company's insurance eligibility had expired, but the partnership's eligibility remained valid.

Instead of entering into the contracts under the name of the licensed partnership, either Mr or Ms Furci misrepresented the entity that was to carry out the work to the insurer on two separate occasions. Acting upon the information provided, Royal & Sun Alliance Australia Insurance Limited, the insurer issued two certificates that evidenced the existence of home warranty insurance, recording the entity that would carry out the work to be the partnership rather than the company.

The company having entered into these contracts was obliged to provide home warranty insurance to cover the contracted work. The company failed to do so and as such contravened section 92 of the Act.

In his written submissions, Mr Furci states that the company's failure to issue home warranty insurance was caused through "a mix up" and should be regarded as "an innocent mistake without any premeditation."

1. Lot 80 Charlton Place, Menai

On 3 October 1999 Mr and Mrs Pattey entered into a contract with the company to construct a two-storey house on land located at Lot 80 Charlton Place, Menai. The contract value was $235,000.

The contract stipulated a construction period of 26 weeks (ie date of completion was to be 21 July 2000 - allowance of five weeks shut down over Christmas/New Year was made in this calculation).

On 4 June 2000 Mr Furci, on behalf of the company sought an extension in time of six and a half weeks due to time lost. He claimed that the extension was due to public holidays and wet weather that prevented work from being carried out on the site within the contracted time. According to the terms and conditions of the contract, the company should have sought this extension sooner.

On 5 July 2001 some nine months after the company had constructively abandoned the site, Mr Furci, on behalf of the company, sought access to complete the work. Mr and Mrs Pattey refused access.

On 9 July 2001 Mr and Mrs Pattey engaged Abacheck Consulting Pty Ltd to inspect the site and prepare a report. On the same day, they lodged an application against the company before the Consumer, Trader and Tenancy Tribunal ("the Tribunal").

On 15 March 2002 Mr and Mrs Pattey received a copy of a report prepared by Doug Reid Pty Ltd, a consultant engaged by the company.

On 26 June 2002 the Tribunal ordered the company, at its own expense to: -

"... do all things necessary on or before 31 August 2002 to comply with any requirements of the Local Council Authority so that it forthwith issues the necessary approval to authorise the applicants to occupy their home at 3 Charlton Place, Menai, ... to rectify in a tradesman like manner at the applicant's home on or before 31 August 2002 all those matters identified as the respondent's responsibility in:

(a) The Doug Reid Pty Limited report of 31 January 2002, and

(b) The report of Abacheck Consulting Pty Limited of 10 July 2001, and

(c) As determined by me in this decision ..."

The company did not comply with the interim order of the Tribunal, as the house remains incomplete. The company has not provided certificates relating to the wet area preparation or the installation of smoke detectors. Due to these failures, Council have been unable to issue an occupation certificate.

On 30 May 2002 a departmental investigator who has specialist practical building knowledge and experience inspected the site. The investigator prepared a report in which he identified a number of defects in the house's construction.

On 29 July 2002 Mr Furci was interviewed regarding these defects and other related issues on site by departmental investigators.

The defects identified by the investigator and any comments Mr Furci made during the interview are summarised as follows: -

Lack of adequate weatherproofing-the area located under the floor of the house's entry and study was extremely damp. According to photographs of the site provided to the Department by Mr and Mrs Pattey, water pools in these areas when it rains. The accumulation of this water could be attributed to the provision of inadequate drainage. The pooling of water creates a potential health hazard and could increase the likelihood of termite infestation.

The Building Code of Australia (BCA) requires the builder to do whatever is necessary to restrict water from entering into or affecting the house's structure.

When interviewed, Mr Furci stated that he had not installed any ground surface or sub-soil drainage outside the external walls to the site because it was not part of the contract. He stated that the company excavated the site to remove soil from near the house to "approximately 500mms below the existing ground levels" and had battered the remaining soil at an angle to direct water away from the house. All landscaping, inclusive of drainage was to be the responsibility of the owners.

Reference to the original quotation, dated 17 August 1999 and provided to Mr and Mrs Pattey by the company states, in part "brick veneer and timber frames and trusses Ag pipe to lower level where required." Mr Furci in his written submissions states that this reference meant that if the drainage pipe was needed it would cost extra.

Failure to provide a glazed gable as approved by Council - a dutch gable is located in the front of the house's roof. It has been clad using Hardie-flex sheeting. The approved plans stipulated that the gable was to be glazed and would permit light to enter and fill a void that was to be located below it and above an internal stair case.

When interviewed, Mr Furci stated that the draughtsman put the glazed gable on the plans. As Mr and Mrs Pattey did not want light into the roof’s cavity it was removed. He further stated that the plans, which he designed, did not provide for a skylight. Therefore, the provision of a glazed gable would be of little value.

In a letter from the company to Mr and Mrs Pattey, dated 8 June 2000 and signed by Mr Furci states, in part "...glass gables are not most efficient light source but skylights do a better job. The trusses don't permit anything but a diffuser...".

In his written submissions, Mr Furci states, "...the glass dutch gable was simply added at the request of the owners and later refused by them!"

Failure to install a highlight above the entry door as approved by Council -a highlight is a glazed panel which allows light to enter. It was not provided and the company bricked in the area above the entry door.

When interviewed, Mr Furci stated that the highlight was not installed as a result of a verbal variation between the company and Mrs Pattey. When spoken to by the investigator Mrs Pattey denied this. She wanted the natural light that the highlight and the glazed gable would have provided.

Failure to install internal balustrading as approved by Council - the approved plans stated that the internal and external balustrading was to be made from wrought iron. Instead, the company installed timber and powder coated aluminium balustrading to the internal stair case.

When interviewed, Mr Furci stated that his quotation referred only to the supply of a "metal type handrail". It provided an allowance of $200 per metre for its supply. He further stated that as Mr and Mrs Pattey were operating on a limited budget they could not afford a wrought iron balustrade.

The investigator sought quotations from four different staircase manufacturers, two located in Sydney and two in Wollongong. An average price of $205 per metre for the supply of wrought iron balustrade was obtained. It was reasoned that as this average price was inclusive of a GST and the company's quotation predated the GST, the company's allowance would have been sufficient.

In his written submissions, Mr Furci refutes the accuracy of the investigator's enquiries. He states that his enquiries with the same manufacturers did not produce the same result.

Pergola - the company only provided the concrete slab and brick piers, it remains incomplete.

When interviewed, Mr Furci stated that the pergola was not part of the contract, though it appears on the approved plans. He stated that the company provided the slab and piers as a "verbal variation" to the contract. Mr and Mrs Pattey were, according to Mr Furci to have the pergola completed at a later stage by another contractor. When spoken to by the investigator, Mr and Mrs Pattey deny this assertion, rather they were of the belief that the company was to complete the work on the pergola.

The absence of written variations to the contract, as required by the Act, needlessly clouds these issues. The approved plans called for the installation of a wrought iron balustrade, a glazed dutch gable with void, a glazed highlight above the entry door and a pergola. The company did not provide a clear explanation for its failure to provide these items.

Failure to install a laundry chute as approved by Council.

When interviewed, Mr Furci stated that he could not install the chute in the same location as marked in the approved plans due to requirements of internal walls on the first floor.

Timber flooring - the boards were installed with gaps between the boards of between 1/2mm to 2mms. In the view of the investigator, these gaps have arisen from either inadequate cramping of the boards when installed or exposure to water before installation.

In his written submissions, Mr Furci states that the whole area should be focused upon rather than the small gaps. He states that the gaps are acceptable from that perspective.

Floor joists - a deep floor joist measuring 240mms in depth was excessively notched (cut in excess of 140mms) over a bearer beneath the foyer area. This modification to the joist does not comply with the BCA or Australian Standard 1684-1992, which stipulates that a 240mm deep joist can be notched to a depth of 60mm as a maximum. Excessive notching of a joist can render it susceptible to splitting. The company should have installed a purpose made bracket to support the joist rather than notch the joist.

In his written submissions, Mr Furci refutes that excessive notching could increase the joist's susceptibility to splitting. He states that some eight nails were used to secure it. He does, in retrospect agree that the use of joist hangers would have been preferable.

Insufficient headroom above garage internal access stairs - to enable sufficient headroom to be provided when the stairs were installed, the company had to cut joists, move internal walls and reduce the available useable floor space in the house's living room.

When interviewed, Mr Furci stated that the company provided a credit to Mr and Mrs Pattey to compensate them for the reduced room size. When spoken to by the investigator, Mr and Mrs Pattey deny this assertion.

Infill panels fitted to garage door piers - the door tracks were relocated to provide an uninterrupted movement of the doors, metal infill panels had to be fitted to either side of the piers to mask the prior installation points.

When interviewed, Mr Furci stated that the infill panels adequately covered the altered track locations and that it could not be avoided.

Unevenly installed lead flashing above entry roof - the unevenly stepped flashing that covers disjunction between the brick wall and entry roof is unsightly and unprofessional.

When interviewed, Mr Furci attributed the work to his sub-contractor and stated that it could easily be corrected by painting the lead the same colour as the brick wall.

Cracks in external brickwork - the company failed to install a control or slip-joint between the suspended concrete patio slab and the supporting perimeter brickwork that would prevent the brickwork from cracking. The failure to use an adequate control joint is contrary to AS 3700 and could result in the brickwork becoming structurally unsound.

In his written submissions, Mr Furci states that the company used a maltoid bitumen dampcourse as a control joint.

The proceedings remain unresolved before the Tribunal. The insurer has not admitted its liability, at this point.

2. 32 Parkwood Drive, Menai

On 3 November 1999 Mr Greg and Mrs Kathy Nicoll entered into a contract with the company to construct a two-storey house on land located at 32 Parkwood Drive, Menai. The contract value was $205, 800.

The contract stipulated a construction period of 30 weeks (ie date of completion was to be 14 July 2000 - allowance of a five week shut down over Christmas/New Year).

On 16 December 1999 the company commenced work on the site.

In a letter dated 27 June 2000, Mr Furci, on behalf of the company sought a 35 day extension of time from Mr and Mrs Nicoll. He claimed that the extension was due to public holidays and wet weather that prevented work from being carried out on the site within the contracted time. According to the terms and conditions of the contract, the company should have sought this extension sooner.

On 2 September 2000 according to Mr and Mrs Nicoll, the house was incomplete. They estimated that it was between 80 to 90% complete. As they were without alternate accommodation they received verbal approval from Mr Furci, on behalf of the company to move into the house effective from 18 September 2000.

In a letter dated 22 September 2000, a representative of Sutherland Shire Council advised Mr and Mrs Nicoll that the site had been inspected on 15 September 2000 and they were required to replace the control fencing. Council further advised that it required a final inspection to be completed before an occupancy certificate could be issued.

On 27 September 2000 Mr and Mrs Nicoll sent a list of items that were incomplete or defective to the company by facsimile transmission.

Mr and Mrs Nicoll advised the company of Council's requirements and having received no response to their earlier list of items they sent the company another copy of the list on 5 October 2000. The company responded and an on site meeting was held on 12 October 2000. Mr Furci attended on behalf of the company and stated that all outstanding work would be completed within two weeks.

On 29 January 2001, following the installation of the garage door, Mr and Mrs Nicoll found the garage to be of a smaller length than had been approved by Council. The internal length measured 5250mm, where as Council's minimum requirement is 5500mm. Without verifying the measurement, the company, when contacted by Mr and Mrs Nicoll rejected that any error had been made.

On 23 March 2001 the company proposed that it would rectify the garage by recessing the rear wall of the garage provided that Mr and Mrs Nicoll paid to it $12,000 of the contract's outstanding balance.

Mr and Mrs Nicoll engaged a building consultant, Mr J Worthington of John Worthington and Associates Pty Ltd to inspect the site and prepare a report. They also engaged Mr K Keane, a licensed contractor to prepare a quotation for the cost of rectification work. Mr Keane estimated that an additional $45,000 would have to be expended to rectify and complete the work.

On 24 July 2001 Mr and Mrs Nicoll lodged an application before the Tribunal against the company.

On 12 October 2001 Mr and Mrs Nicoll engaged Alfred Frasca & Associates Pty Ltd to inspect the site and prepare a report. In his report, dated 18 December 2001, Mr Frasca concluded that "... it will be more economical to demolish some of the constructed works and reconstruct it in approved manner in accordance with architectural and structural plans prepared by a suitably qualified consultant, rather than attempting to rectify the defective works."

On 20 December 2001 a directions hearing was held. The Tribunal issued interim orders to the company, requiring it to repair a leak in the laundry and to fix the entry stairs of the house by 21-22 December 2001. The Tribunal further ordered that a conclave of experts be formed to produce a report that would identify the defective or incomplete items in dispute and determine appropriate means for the rectification of these items. The Tribunal also joined the partnership of Mr and Ms Furci and the home warranty insurer into the proceedings.

On 14 February 2002 the investigator inspected the site and prepared the report. The report identified a number of defects in the house's construction.

On 5 April 2002 the Tribunal was to conduct a hearing of the application, however Mr Furci did not attend. When contacted he stated that he had not received sufficient notice of the hearing. The hearing was vacated and a new date set.

On 16 April 2002 a representative of Pestforce Pty Ltd carried out an inspection of the site and identified evidence that there was active termite infestation in the sub-floor area of the house.

In a letter dated 3 June 2002, Council advised Mr and Mrs Nicoll that the company had to complete the previously identified outstanding work on the house within 28 days. If not, Council would issue a Notice of intention to give an order under section 121H of the Environmental Planning and Assessment Act, 1979. Council has not issued a Notice of intention.

The proceedings remain unresolved before the Tribunal. The insurer has not admitted its liability at this point.

On 29 July 2002 Mr Furci was interviewed regarding these defects and other related issues on site by departmental investigators.

The defects identified by the investigator and any comments Mr Furci made during the interview are summarised as follows: -

Lack of adequate weatherproofing - water was found pooling under the floor of the house at the rear of the garage. The occurrence of pooling water was attributed to the company's failure to install adequate drainage. This creates a potential health hazard and increases the likelihood of termite infestation. The BCA requires that all ground moisture should be prevented from entering or affecting the house, as it can contribute to undue dampness and deterioration of building elements.

On 6 November 2001, according to Mr S Clarke, General Manager of Pestforce Pty Ltd inspected the site and identified a number of locations where termites could gain concealed access to the house and where the termite shielding was either missing or incomplete.

On 16 April 2002 a representative of Pestforce Pty Ltd carried out another inspection of the site and found "... active termites attacking timber in the sub-floor area of the house."

When interviewed, Mr Furci stated that he did not backfill against the side of the garage or the rear of the house. He excavated and battered the soil away from the house. He did not install agricultural drainage, as it was not part of the contract and landscaping was the responsibility of the owner.

In his written submissions, Mr Furci states that he was unaware that it was the builder's responsibility to prevent water ingress under a building. With regard to termite infestation, he stated that he spoke to Mr Clarke on 10 September 2002 who advised him that the termites were in a "loose stick of timber" and not the building structure.

Timber floor - the floor in the family/dining room bounces due to excessive spans between the bearers. The bearers measure between 90mm to 100mms in depth, 75mms wide and span gaps between the centres of the supporting piers of between 2000mm to 2400mms. The company did install double bearers, however these double bearers have not been laminated, rather they have been left to move independently, which contributes to the bounce.

The relevant AS 1684-1992 requires bearers that are supporting floor loads of 2300mms to have a maximum span of 1900mms between piers.

When interviewed, Mr Furci stated that his sub-contractor was responsible for installing the piers in the incorrect positions. It would appear that, rather than correct this placement error an inappropriate alternate means was used to compensate for it.

The company and Mr Furci relies upon a report prepared by Mr S Eskander of Eskander Partners, consulting engineers, which stated that the "... floor joists and bearers are considered adequate for the loading applied ...". Mr Eskander's report, according to Mr Furci is based upon AS 1684.1-1999. As this standard did not take effect until 1 January 2000 and the company provided work before this date, it is the incorrect standard to be applied.

Reference to AS 1684-1999 indicates that the requirement had changed when compared to AS 1684-1992, whereas, the 1992 version required a maximum span of 1900mms between piers, the 1999 version required a maximum span of 1700mms between piers.

Additionally, to compensate for the use of bearers of varying dimensions, the company used packing material that comprised of pieces of Masonite to fill the varying gaps that were encountered between the bearers and the piers.

The AS 1684-1992 requires all packing material, where used to be fixed and to be made from incompressible sheets of a corrosion-resistant material. The material should cover the full area of contact. In the view of the investigator, Masonite will compress over time contributing to the floor line's evenness.

In his written submissions, Mr Furci refutes this view and states that Masonite will not compress.

Uneven floor surface - the flooring in the family, dining and kitchen areas were found to be uneven. The investigator examined the floor and found that over a 2000mm section the floor undulated from between 10mm to 15mms. This unevenness is directly attributable to the company's failure to install the bearers in a level and straight line in accordance with the requirement of AS 1684 which stipulates that bearers are to "... give level bedding for superimposed joists...".

The flooring laid in the family and the kitchen has gaps between the boards of between 1mm to 3mms.

When interviewed, Mr Furci stated that the gaps were as a result of moisture under the floor, which caused the boards to swell when the room temperature increases the moisture evaporates and the boards contract. It is the company’s responsibility to have fixed the boards more securely to the joists and to have minimised the amount of moisture that is able to effect the boards from beneath the house by providing adequate ventilation and/or drainage.

Internal stairs - the stairs were constructed not in accordance with the BCA and present as a potential safety hazard. The treads of each step were installed at an angle. The forward edge of each step is l0mms higher than the rear edge where it joins with the riser of the next step. The flooring at the top of the stairs has been installed with a 12mm hump. There is no central spline to support the weight of the stairs, which has permitted the stairs to sag along the centre line.

In his written submissions, Mr Furci states that the load of each tread is transferred through two independent risers and that this combines to equate to the requisite 170mm x 40mm timber support for each tread. In the investigator's view this is incorrect. To achieve the result that Mr Furci argues the two risers would have to be laminated together, as they are not, they only provide the support of a timber support measuring 170mm x 20mms.

Insufficient headroom above garage stairs - an internal staircase was installed beneath the garage door track. It fails to provide sufficient headroom for users. The clearance between the steps and the protruding metal track frame is 1810mms. This does not comply with the BCA, which requires the clearance to be of "... a height that does not unduly interfere with the proper functioning of the room or space..."

When interviewed, Mr Furci agreed that there was insufficient headroom and the company should have addressed it when the garage door was installed by fitting a different type of track.

In his written submissions, Mr Furci states that the headroom is acceptable and that the problem could be corrected by tilting the track upwards. He states that he could not have anticipated this problem prior to the installation.

Tiling - the wall tiling in the ground floor toilet is incomplete. The contract stipulated that wall tiling would be to a height of 1200mms (five rows of tiles) from the floor. However, on the wall behind the pan and cistern, the company installed one row of tiles.

When interviewed, Mr Furci agreed that the tiling was incomplete.

Additionally, the tile junctions between the floor and the wall, the bath hob and the wall were grouted. This has resulted in cracks appearing in the grout. The BCA requires these junctions to be formed from a silicone sealant to create a flexible movement joint to prevent cracking.

When interviewed, Mr Furci stated that the requirement to use silicone sealant had only recently been amended and as such some concession should be shown. The requirement took effect on and from 27 February 1998 some 22 months prior to the work being contracted.

Sliding door - the rear sliding door unit has gaps between it and the lintel. This has resulted in the unit sagging in the middle. The gaps are most noticeable at either end of the unit.

In his written submissions, Mr Furci agrees that there is a problem and attributes the cause to the sub-floor structure.

Brickwork - the width of the mortar used in the perpend joints of the brickwork is excessive. The company provided widths of between 25mm to 35mms. The BCA and AS 3700 stipulate that mortar joints are to be a nominal 10mms in width and that a deviation of thickness of plus or minus 5mm on average is acceptable.

Additionally, there is an absence of weep holes in the brickwork under the windows. Weep holes assist to remove water that can enter around the window frames.

In his written submissions, Mr Furci states that these issues are attributable to his sub-contractor's failure to apply the requisite standard and to the owners' brick selection.

Roof flashing - apron flashing to the lower roof was inadequately installed, permitting rain to enter into the ground floor roof cavity. There should have been over flashing or a weathering fold cut into the brickwork. At the least, silicone sealant should have been used to provide a water-tight seal against the brickwork.

In his written submissions, Mr Furci agrees that over flashing should have been applied and attributes this failure to his subcontractor.

Internal finishes - the house's finished surfaces generally have been completed to a poor standard. This is evident from such things as the use of damaged window reveals, an excessively cut tile, inadequately supported walk-in closet shelving, an inadequately installed laundry door and an inadequately supported dividing wall support.

In his written submissions, Mr Furci states that the excessively cut tile was due to the owners selecting a smaller than normal tap flange. He agreed that the other items should be addressed."

The Evidence

17 The Director-General relies on a report prepared by Mr Mark Tuckwell, an Investigator with the Department. Mr Hanlon’s reasons for the 19 November 2002 decisions that are set out above reflect the views expressed in Mr Tuckwell’s report. Mr Tuckwell also appeared and gave evidence at the hearing and was subjected to cross-examination. The Director-General also relies on a report and oral evidence of Mr Albert Frasca, a structural engineer, and evidence of Ms Melinda Pattey and Ms Kathy Nicholl. By arrangement between the legal representatives of the parties, Mr Pattey and Mr Nicholl were not called to give evidence.

18 The Applicants rely on the evidence of Mr Furci and Ms Mary Furci, a report and oral evidence of Mr Sam Eskanda, a design engineer, and a report and oral evidence of Mr Doug Reid, a building consultant.

Mr Tuckwell’s Evidence

19 Mr Tuckwell’s evidence is contained in his report dated 13 August 2002 and the annexures to that report. It is a comprehensive report spanning some 53 pages and numerous annexures. Mr Tuckwell also gave oral evidence in relation to a number of items and was cross-examined.

20 Mr Tuckwell adopted the views expressed in his report and his evidence was not significantly varied as a result of the cross-examination. He admitted in cross-examination that delays were evident during the financial year 1999/2000 due to the introduction of the GST and the Olympics.

Mr Frasca’s Evidence

21 Mr Frasca's evidence was that the floor bearers in the Nicholl’s house did not comply with the span tables under the Australian Standard AS 1684 (1992) or 1684 (1999). He drew particular attention to the significance of "double bearers" not being mechanically connected. He considered that this omission prevents the presence of double bearers being taken into account for the purpose of calculating load bearing capacities. As the "spring" and "bulk" of bearers is different, it results in one of the unconnected double bearers taking the load, rather than the pair.

22 Mr Frasca did not agree with the conclusions contained in the report of Eskander Partners dated 5 Apri1 2002 in relation to the compliance of the bearers and floor joists with the requirements of the Australian Standards. He attributed the dip in the floor at the top of the Nicholl’s stairs to flexing of the over spanned floor joists in that area. Mr Frasca attributed the problem with the treads to a lack of movement jointing in the stair members to take up the swelling and distortion of the stairs members by sub floor moisture induced swelling.

23 Mr Frasca gave evidence of a bituminous membrane applied to the side wall of the Nicholl’s garage beneath ground level. He suggested that the only purpose for such a membrane is to prevent water ingress where the earth is in contact with the wall. A water test he conducted demonstrated its ineffectiveness as water entered to the sub floor area. Mr Frasca also gave evidence in relation to moisture build up under the house due to lack of ventilation and cross ventilation and closed chambers. In his opinion the lack of adequate drainage down the side of the garage was the primary cause of the moisture and water problem under the house.

The Evidence of Ms Nicholl and Ms Pattey

24 Both witnesses gave oral evidence in addition to signed statements tendered into evidence. Each had complaint about delay, defects not attended to, design defects, unapproved variations to design, moisture problems, lack of insurance cover. Each had pursued remedies against the Applicants in the CTTT.

25 Each disputed Mr Furci's evidence with respect to discussions between them about variations to the contract. Ms Pattey’s CTTT claim is still to be determined. A buy back settlement was reached in relation to the Nicholl contract.

26 Ms Nicholl disputed Mr Furci's claims to have left the soil adjacent to the garage wall battered back away from contact with the side wall of the garage. Ms Nicholl’s evidence was that this area was backfilled when they moved into the property.

Mr Furci’s evidence

27 Mr Furci provided a signed statement tendered into evidence and also appeared and gave oral evidence. Mr Furci’s statement is primarily concerned with his understanding of procedures during the investigative process, the issuing of the Notice to Show Cause and his response to the Notice to Show Cause. Essentially this goes to the weight that should be given to statements that he made in an interview with officers of the Department and his failure to provide expert evidence in response to the Notice to Show Cause.

28 Mr Furci also provided evidence of the roles that he and Ms Furci played in the conduct of the businesses. This included evidence that Ms Furci undertook the majority of the office work including responsibility for obtaining insurance. He conceded that the work on both the Nicholls and the Pattey contracts had been carried out without insurance being in force with respect to the work however explained this as the consequence of an administrative error.

29 Mr Furci also conceded that the work had not been completed within the time stipulated in the contract. Mr Furci gave evidence to explain delays both with respect to the Nicholls and the Pattey contracts. His evidence is that there were valid reasons for the delays during the financial year 1999/2000 due to the introduction of the GST and the Olympics. These were industry wide delays and therefore extensions were warranted. He asserted that extensions were applied for and that other extensions could have been claimed.

30 With respect to the issue of damp sub-flour conditions alleged in relation to the Nicholl property, Mr Furci conceded that no external drainage had been installed but he asserted that there was no contractual requirement for the Company to carry out this work. He maintained that the water ingress has resulted from the Nicholl’s failure to engage a landscaper to complete the task of ensuring stormwater was diverted from the premises. Mr Furci also asserted that at handover no soil had been backfilled against the brickwork of the garage.

31 Mr Furci conceded that isolated piers had been placed in the wrong position, but asserted that the bearers comply with the span provisions of AS 1684.1-1999. He did not accept the Commissioner’s argument that the applicable standard is AS 1684.1-1992 and not the 1999 standard. Nor did he accept that the work did not comply with that standard.

32 Mr Furci conceded that Masonite had been used as packing for the bearers. His evidence was that its use was limited to above internal piers, not perimeter piers, where the loading is greater. He asserted that Masonite is an appropriate packing material in that situation.

33 Mr Furci did not concede that the Nicholl’s floors are out of level. With respect to the allegation that the floorboards are excessively gapped he asserted that the extent of the gap is related to swelling and shrinkage. He does not concede that this defect is a result of defective building work, but as a result of sunlight affecting the moisture content of the boards and as a result of excess moisture under the house. His evidence was that the flooring was delivered in plastic packs and the ends were opened to acclimatise the boards. He asserted that this was in accordance with the supplier’s specification.

34 Mr Furci did not concede that the condition of the Nicholl’s stairs is a result of defective building work. He asserted that this condition is a result of water ingress causing swelling and that the Nicholls were responsible for landscaping. The water ingress is a consequence of their failure to have that work carried out. Mr Furci conceded that there was inadequate headroom between the stairs and the running tracks of the garage door. He stated that this defect is minor in nature, and inexpensive to rectify. He also conceded various problems related to tiling, an inadequately installed laundry door, gaps between the rear sliding door unit and the lintel resulting in the unit sagging in the middle, the undersized bedroom window, defective roof flashing, defective walk-in robe shelving and the out of plumb dado wall.

35 Mr Furci did not concede that the brickwork joints are excessively wide as a result of defective building work. He asserted that excessive joints are a consequence of the irregular in size and shape of the bricks. While lack of weepholes is conceded, Mr Furci asserted that this defect does not affect the structural integrity of the construction.

36 Mr Furci conceded several issues in relation to the Pattey residence. His evidence is that the Patteys were compensated in respect of the laundry shute. Mr Furci admits the notching of the timber joists, but says that there is no evidence of this defect affecting the structural integrity of the premises. In relation to the internal handrail his evidence was that the owners would not agree to exceed the provisional allowance sum as specified in the contract, and agreed to the installation of powder coated aluminium hand rails. He agreed that this agreement is not documented.

37 With respect the allegation that inadequate drainage was provided to the Pattey property, Mr Furci stated that he had not installed any ground surface or sub-soil drainage outside the external walls to the site because it was not part of the contract. He stated that the company excavated the site to remove soil from near the house to and had battered the remaining soil at an angle to direct water away from the house. He asserted that all landscaping, inclusive of drainage was to be the responsibility of the owners.

38 With respect to the pergola, Mr Furci’s evidence was that the construction of the pergola, as opposed to pouring the slab, was not included in the contract price but was to be carried out only as an extra. The owners did not agree to this work. Mr Furci asserted that there was an agreement to pour the pergola slab at the same time as the main house slab in order to obtain approval for the structural elements of each construction simultaneously, rather than filing a second development application. He denied that the agreement was only obtained at the time the pergola slab was poured but maintained that it was agreed well in advance of that time.

39 He asserted that because of a design defect the glazing to the Dutch gable would only illuminate the roof cavity; therefore the provision of a glazed gable would be of little value. The owners rejected a skylight to illuminate inside the house. Mr Furci asserted that the glazed panel highlight over the front door was not installed as a result of a contractual variation requested by the owners.

40 Mr Furci conceded that the garage doors track had to be re-located due to the presence of an "I" beam. This resulted in a gap either side of the centre brick requiring infill panels to mask the prior installation points.

Ms Furci’s evidence

41 Ms Furci provided a signed statement tendered into evidence and also appeared and gave oral evidence. Ms Furci’s statement is primarily concerned with the roles that she and Mr Furci played in the conduct of the businesses. This included evidence that she undertook the majority of the office work including responsibility for obtaining insurance. In that regard she stated:

"Some time in 1998 our accountant gave us some advice to set up a company to run the business, and to wind down the partnership. In the second half of 1999, and probably in September or October 1999, I contacted our insurer, Home Owner's Warranty, and had a telephone discussion with an officer regarding obtaining insurance certificates in the name of Havenview Homes Pty Ltd and not in the partnership name. At the time of the telephone conversation the person checked the financial information they had on file for the partnership. At that time, to the best of my recollection, the partnership had a turn-over of approximately $2.5 million per annum. I do recollect the person from Home Owner's Warranty said words to the following effect:

"This shouldn't be a problem for us to issue certificates in the name of the company instead"

I filled out a form for eligibility and insurance and faxed it to Home Owner's Warranty. I don't have a copy of that form anymore. It was definitely forwarded in September or October 1999. It was taking about 3 or 4 months for the insurer to issue eligibility then certificates at that time. I do recollect that we were very busy at the end of 1999 and going into 2000 as the GST was to be introduced in July of 2000 and the Olympics were to be in October of 2000, We had a number of projects that were still in the partnership name at the end of 1999 and I wanted to phase that out and have the certificates for 2000 issued in the corporate name. After I faxed the form to Home Owner's Warranty I believed that this would be the case.

My husband rarely, if ever, had anything to do with obtaining insurance certificates for jobs. He would tell me what jobs were coming up and I would make the necessary application for a certificate for that job. My husband had nothing to do with obtaining the Pattey and Nicoll's insurance certificates, and I did not check them when they arrived to make sure they were in the corporate name. I did not pick up the mistake because there were many certificates coming through at that time. I just assumed that after the conversation with Home Owner's Warranty that the certificates would be in the name of the company. It was a mistake that they were still issued in the name of the partnership, and I did not point this out to my husband. The first time we became aware of the mistake was during proceedings with the Pattey's and the Nicoll’s."

42 In her evidence before the Tribunal Ms Furci conceded that rather than there being a "handover" of business operations by the partnership in favour of the Company, there was significant parallel trading by the two entities.

Mr Eskanda’s evidence

43 Mr Eskanda is an engineer. He provided evidence with respect to the bearers in the Nicholl property and of his calculations to demonstrate that those bearers are installed in a way that satisfies the requirements of the applicable standard. His evidence contradicts that provided by Mr Frasca.

44 Mr Eskander agreed that whether bearers were mechanically connected was a relevant factor to determining the performance of bearers, but said that the code made provision for double bearers that are not connected. He did not indicate what clause of the Code made such provision.

45 Mr Eskander also agreed that the sizing of the bearers was significant to their functioning. He agreed that if bearers were not of equal size only one would take the load but said that he did not see any paired bearers of unequal size.

Mr Reid’s evidence

46 Mr Reid is a building consultant. He provided evidence with respect to each of the properties. Mr Reid produced photos and gave evidence with respect to the brickwork and weepholes. His evidence was that the bricks as delivered were irregular in size and shape and this resulted in excessive joints however the structural integrity of the construction is not affected by this defect. He stated that most new project he observes do not have weepholes and the lack of weepholes does not affect the structural integrity of the construction.

47 Mr Reid gave evidence with respect to the issue of landscaping and the respective costs of the work required. He said that, in his experience, he would have expected that if the parties had agreed on the matter of who was to undertake the landscaping works it would have been reflected in the contract price.

Findings and reasons

48 Detailed submissions were provided on behalf of each of the parties. The Director-General relies upon a list of defective building works in respect of the Pattey contract and the Nicholl contract. Mr Grey’s detailed submissions addressed each of the items in issue. Those submissions reflect the views expressed in Mr Hanlon’s reasons for the 19 November 2002 decisions.

49 In respect of those allegations, Ms Clark’s primary submission is that in order to disqualify a corporate entity or individual, who has held a contractor's licence since September 1991 and whose livelihood depends on the provision of a licence, the Director-General must show a contumelious disregard for the law. In her submission it is not sufficient to rely upon cumulative breaches over a period of twelve months, where the majority of those defects are minor, or general in nature, and do not affect the structural integrity of the construction.

50 Ms Clark made strong submissions in relation to Mr Tuckwell's evidence. Those submissions focused on the weight that his evidence ought be given, particularly in light of his employment. Ms Clark submitted that the Tribunal is entitled to determine the weight that the evidence ought be given. She referred to the New South Wales Court of Appeal decision in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 as support for her submission that evidence of an expert nature is not relevant to determining a fact in issue when the asserted fact has not been proved, either by lay evidence, or by the expert themselves. On the basis of the same authority she argued that for evidence to be admissible under section 79 of the Evidence Act, or given any weight if admissible the expert must explicitly state why his or her expertise is apposite to the giving of the opinion.

51 Ms Clark submitted:

"Evidence of a partisan nature is not, and cannot be defined as expert evidence as it would merely fall within the described category of personal and second-hand views as to the credibility of the complainant, as outlined above. Despite the determination of the Victorian Supreme Court in Fhagenblat v Feingold Partners Pty Ltd (2001) VSC 454 that bias, of itself, is no grounds for rejecting evidence [my emphasis], there is no fetter on a Tribunal’s power to give that evidence little weight once admitted. To rely on expert evidence which is clearly designed to act as a submission on the part of either party is to fall into appellable error.

As a natural consequence of his employment, Mr Tuckwell's evidence is tainted by his contractual obligation to act under direction of his superiors. An impartial mind cannot be constrained in this way. The investigation that took place was commenced with an end result in mind. In cross-examination, Mr Tuckwell admitted that he obtained information from the complainants in the form of chronology and that this was not put to Mr Furci during his record of Interview. He also admitted that he was aware the complaint with respect to the Pattey residence was also the subject of CTTT proceedings. This evidence indicates a mere acceptance by Tuckwell of the complaints made by each complaint, and a denial of natural justice when interviewing Mr Furci in that all information was not provided to him. This is not the procedure followed by an independent expert."

52 In contrast, Mr Grey’s submissions in relation to Mr Tuckwell’s evidence is that neither his observations or conclusions were generally traversed in cross-examination. In respect of the majority of items, questions put to Mr Tuckwell went to mitigation eg were the items general or minor defects, as distinct from major structural defects, and the extent of work required to affect rectification. Mr Grey submitted:

"There was no attack on Mr Tuckwell's expertise and the only potential criticisms of his investigation related to the taking of the Record of Interview with Mr Furci, and his not interviewing Ms Furci. It is submitted nothing turned on these points.

It is submitted that Mr Tuckwell has carried out a competent, detailed and fair investigation, the results of which are fully reported upon. The Tribunal should place reliance upon his Report and evidence."

53 While Mr Grey is correct in asserting that there was no attack on Mr Tuckwell's expertise, there were clear submissions as to the weight that should be given to his evidence.

54 The conflicting submissions are effectively resolved by reference to views expressed by the Appeal Panel in the matter of Commissioner of Fair Trading v Harb & Anor [GD] [2004] NSWADTAP 17 at paragraphs 22 to 25. The Appeal Panel stated:

"22 As we have said, there was no suggestion that Mr Tuckwell did not have the requisite qualifications or experience to give an expert opinion. Consequently the decision to give no weight to Mr Tuckwell’s evidence must have been based on "bias or interest by reason of conduct or other circumstances." Rather than applying this test, the Tribunal approached the question of reliability by reference to a so-called "requirement" for an expert to give "independent, objective and unbiased" evidence. (See [52] of the Tribunal’s decision quoted above at [11].) The Tribunal derived that proposition from The Ikranian Reefer [1993] 2 Lloyd’s Rep 68 where Cresswell J said at 81-2:

An expert witness should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters within his expertise ... An expert ... should never assume the role of advocate.

23 Similarly, in Whitehouse v Jordan [1980] UKHL 12; [1981] 1 WLR 246 at 256-257 Lord Wilberforce said:

. . .it [is] necessary that expert evidence presented to the Court should be, and should be seen to be, the independent product of the expert, uninfluenced as to form or content by the exigencies of litigation.

24 While an expert witness has a duty to the Court (and, by analogy, to the Tribunal) to give independent evidence, that duty is a statement of principle, not a rule of evidence. In FGT Custodians Pty Ltd (Formerly Feingold Partners Pty Ltd) v Fagenblat [2003] VSCA 33 the Victorian Court of Appeal dealt with a similar proposition to that put forward by the Tribunal. That proposition was that "expert witnesses should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters [concerning] that person’s expertise." At [15] Ormiston JA with whom Chernov and Eames JJA agreed, said that:

As to the first proposition, all that has been said, particularly in recent years, about the desirability of expert witnesses providing independent evidence by way of opinion to the courts should be seen as expressions of the ideal manner in which expert witnesses should go about their tasks and the resultant opinions which those witnesses should strive to express. With but a few minor exceptions, none of them should be treated as stating principles of the law of evidence but they should be seen rather as admonitions to those who would give expert evidence, especially as to the way they should prepare and present that evidence to courts, if they and their clients wish it to be acted upon.

25 On the basis of this authority, the Tribunal’s approach to the question of reliability by reference to a so-called "requirement" for an expert to give "independent, objective and unbiased" was misconceived. It should have asked itself how reliable Mr Tuckwell’s evidence was in the light of any evidence of bias or interest by reason of conduct or other circumstances."

55 Accordingly, Mr Tuckwell’s evidence is to be weighed in the light of any evidence of bias or interest by reason of conduct or other circumstances. In my view, the mere fact of his employment in the Department is not of itself evidence of bias or interest. Mr Grey has correctly identified the only potential criticisms of Mr Tuckwell’s investigation as that related to the taking of the Record of Interview with Mr Furci, and his not interviewing Ms Furci. While I agree that these incidents indicate a serious flaw in the approach taken in the disciplinary process, I am satisfied that these failings are cured through prosecution of the application to this Tribunal. I have no other reservations about his report and in general I consider that the evidence presented supports his findings.

56 Ms Clark also made submissions in relation to Mr Frasca’s evidence. She argued that it is inappropriate for the Director-General to adopt Mr Frasca’s report as the Nicholls commissioned it. She argued that such an adoption is fraught with danger given the standard the evidence ought to meet under Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. While I generally agree with the principle behind this submission, I do not accept it is applicable in the circumstances of this matter. Mr Frasca attended the hearing and gave evidence and Ms Clark had the opportunity to cross-examine him. Again, it is my view that any flaw in the approach taken by the Director-General has been cured by this process.

57 Notwithstanding that view, I found Mr Frasca to be an argumentative and confusing witness. Further, as Ms Clark has correctly identified, some of his evidence directly contradicted that of Mr Tuckwell as to the cause of defects. I also note that the Director-General does not rely on a large part of Mr Frasca's report. The cogency of his evidence is therefore to be viewed in the light of these factors. On balance I am unconvinced by his evidence in relation to the issue of whether the span of the bearers in the Nicholl property meet the requirements of the applicable standard.

58 A further issue that I consider to be of significance is that many of the issues raised in relation to the Pattey property are the subject of proceedings in the CTTT. Those proceedings have not yet been finalised and I agree with Ms Clark’s submission that to make a determination based on such allegations could result in an embarrassing clash in determinations as between this Tribunal and the CTTT. This remains the situation even though these proceedings perform a different purpose to those in the CTTT. Nevertheless, I note that many of the issues raised in relation to that property are conceded.

59 I agree with the general thrust of Ms Clark’s submission regarding the nature of evidence necessary to warrant disqualification. In my view, the evidence presented is not such as to justify that action. Nevertheless I am satisfied on the evidence before me that the work which has been the subject of these proceedings falls far short of the standard that can be reasonably expected from a licensed builder in this State.

60 I agree with Ms Clark’s assessment of Mr and Ms Furci as disorganised. I am satisfied that their disorganisation provides a plausible explanation for the fact that uninsured building work was carried out in breach of section 92 of the Act. I accept their evidence in regard to this issue. I make no finding of dishonesty in regard to this issue, however it does not follow that the breach of section 92 of the Act is excusable.

61 I also accept the evidence of industry wide delays during the 1999/2000 financial year. I am satisfied that the delays in relation to the Pattey contract and the Nicholl contract were largely attributable to the circumstances that existed at the time. Nevertheless, I agree with Mr Grey’s submission that Mr Furci failed to seek extensions of time as allowed for in the contracts. If that approach had been adopted the owners could have had the opportunity to contest the claims, as the events justifying the claimed extension would still be in recent memory. Further, it would have allowed the owners to manage their plans for moving into the property. To make "lump sum" extension claim of many weeks, just days prior to the contract completion date, is not only unreasonable and totally unacceptable, it is also poor business practice.

62 It is apparent that there were serious communication problems between Mr Furci and these clients. This is particularly the case in relation to their respective understanding of what was provided for by the Pattey contract and the Nicholl contract insofar as landscaping is concerned. The contract terms are by no means clear on this point. I am persuaded by the argument that if the parties had agreed that the builder would undertake the landscaping works it would have been reflected in the contract price. I am equally persuaded that the owners understood that the builder would undertake those works. Those are matters for determination by the CTTT. This matter can be determined without deciding the issue.

63 Negotiations in relation to variations of the contracts appear to have been equally troublesome. In my view, these issues reflect inadequate management ability and a lack of understanding of customer relations rather than lack of trade skills or dishonesty.

64 Nevertheless some aspects of Mr Furci’s evidence cannot be explained in those terms. With respect to the issue of whether soil was left adjacent to the Nicholl’s garage wall Mr Furci claims to have left the soil battered back away from contact with the side wall whereas Ms Nicholl’s evidence was that this area was backfilled when her family moved into the property. These two versions of events are irreconcilable. In my opinion, it is probable that Ms Nicholl has provided an accurate account of the issue, however it is possible that each of their recollections is tainted as a result of the animosity that is apparent in the history of that project.

65 I note that the Applicants have undertaken numerous building projects and that the Director-General’s case is limited to only two of them. There was reference to one other matter that had been brought to the Director-General’s attention but otherwise there does not appear to be a wider issue in relation to the Applicants’ work. Nevertheless, the Applicants’ conduct in relation to the Pattey contract and the Nicholl contract demonstrated a lack of quality control and inadequate supervision. Mr Furci has demonstrated a lack of insight into the consequences of his conduct for the homeowners and this has resulted in deterioration in the relationships between the Applicants the homeowners to the extent that litigation followed.

66 As I have indicated above, I consider that the evidence presented largely supports Mr Tuckwell’s findings. However, the majority of the defects that I consider to be proven were of a minor or general nature. I have not found there to be fraudulent or dishonest intent and deliberation on the part of the Applicants in relation to those defects. Nor have I found particular carelessness or wilfulness of their conduct. I do not consider that the particular defects are such as would justify action as harsh as that determined by the Director-General. I agree with Ms Clark that this was excessive.

67 I note that on 31 January 2003 Judicial Member Higgins granted a stay of the Director-General’s decisions subject to the conditions outlined above. Namely, Mr Furci is not to enter into contracts under his personal licence; and the Company is restricted to entering into one contract at a time in respect of one dwelling only. I am not aware that the Applicants have breached those conditions in any way or of any further problems arising since the stays were put in place.

68 I do not believe that the protection of the public requires that Mr Furci or the Company be excluded from the industry to a greater extent than that imposed under the conditions of the stay. However, in my view it is appropriate that those conditions remain in place for a two-year period. It is also my view that Mr Furci would benefit from management training before his licence is fully reinstated.

69 Accordingly, it is my view that the correct and preferable decision is that the Director-General’s decision be set aside. In its place should be substituted the determination that the conditions imposed by Judicial Member Higgins on 31 January 2003 remain in place until 31 January 2005. Each of the licences is to be reinstated from that date.

Orders:

1. The determinations of the Director-General, Department of Fair Trading in relation to the contractor licence held by Havenview Homes Pty Ltd, and the contractor licence held by Mr Patrick Furci are set aside.

2. I substitute for those determinations the decisions that the licences are to be reinstated subject to the conditions of the stay imposed on each of those licences by Judicial Member Higgins on 31 January 2003. Those conditions are to remain in place until 31 January 2005.