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Administrative Decisions Tribunal of New South Wales |
Last Updated: 11 October 2004
NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL GENERAL
DIVISION
CITATION: Hutchings Electrical Pty Limited & Anor v
Director General, Department of Fair Trading [2004] NSWADT 23
PARTIES: FIRST APPLICANT
Hutchings Electrical Pty
Limited
SECOND APPLICANT
Steven Owen Hutchings
RESPONDENT
Director
General, Department of Fair Trading
FILE NUMBERS: 033095,
033096
HEARING DATES: 28/07/2003-31/07/2003
SUBMISSIONS CLOSED:
31/07/2003
DECISION DATE: 04/02/2004
BEFORE: Montgomery
S - Judicial Member
LEGISLATION CITED: Administrative
Decisions Tribunal Act 1997
Fair Trading Act 1987
Home Building Act
1989
CASES CITED: Stephens v Director General, Department of Fair
Trading [2003] NSWADT 173
Director General, Department of Fair Trading v
Cohen [2000] NSWFTT 3
Hutchings -v- Commissioner of Police, New South Wales
Police Service [2001] NSWADT 62
Maurice Neville Hinchcliffe v Building
Services Corporation Commercial Tribunal of NSW No. 1115 of 1995 (unreported)
Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186
Taylor -v- Director
General, Department of Transport (GD) [2001] NSWADTAP 29
APPLICATION:
Home builder - cancellation of contractor licence
Home Builder -
cancellation of supervisor or registration certificate
Home Building Act -
home builder - cancellation of contractor licence
Home Building Act - home
builder - cancellation of supervisor or registration certificate
MATTER
FOR DECISION: Principal matter
APPLICANT REPRESENTATIVE: FIRST
& SECOND APPLICANT
T Davie, barrister
RESPONDENT REPRESENTATIVE:
RESPONDENT
A Wilson, solicitor
ORDERS: 1. I affirm the decision of
the Commissioner for Fair Trading that the contractor licence issued to
Hutchings Electrical
Pty Limited is cancelled and that the Company is
permanently disqualified 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,
or
(c) an officer of a
corporation that is the holder of an authority.
2. The decision of the
Commissioner for Fair Trading in relation to the supervisor's certificate issued
to Mr Steven Owen Hutchings
is set aside. I substitute for that determination
the decision that the supervisor's certificate issued to Mr Steven Owen
Hutchings
is cancelled and that Mr Hutchings be disqualified for a period of
three 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,
or
(c) an officer of a corporation that
is the holder of an authority. Such period of disqualification is to take effect
from 10 March
2003
Reasons for Decision:
Background
1 Hutchings Electrical Pty Limited ("the Company") and Mr Steven Hutchings ("Mr Hutchings") each hold a licence under the Home Building Act 1989 ("the Act"). The Company holds contractor licence number EC40179. Mr Hutchings is the Company’s nominated qualified supervisor, and he holds a qualified supervisor certificate number EA44989.
2 On 9 September 2002, a delegate of the Commissioner for Fair Trading ("the Commissioner"), issued show cause notices under section 61 of the Act directed to the Company and Mr Hutchings. The notices invited them to make submissions as to why disciplinary action should not be taken against them. The Company and Mr Hutchings responded to the show cause notices through their solicitor by letter dated 18 October 2002, and made submissions in relation to them.
3 The show cause notices contained minimal information relating to the applicants’ alleged conduct. The details of the allegations were provided on 21 January 2003 when the Commissioner’s delegate, Mr Christopher Hanlon Director, Compliance and Standards Division for the Department of Fair Trading (now the Office of Fair Trading), issued a Notice of Decision under section 64 of the Act in relation to each of the show cause notices. That Notice of Decision was subsequently withdrawn and a new Notice of Decision was issued on February 2003.
4 The reasons provided with the Notice of Decision ("Mr Hanlon’s reasons") provided the applicants with an outline of the case against them and the Commissioner’s delegate’s views in relation to the issues raised. Mr Davie submitted that the show cause notices do not comply with the requirements of the Act. Mr Hanlon’s reasons were the first document provided to the applicants that met those requirements. In part, those reasons stated:
"The Department commenced to investigate the conduct of the Company and its director and nominated supervisor Mr Hutchings due to the unsatisfactory number of complaints that had been lodged against the Company.
The investigation established that the Company operates primarily in Sydney's Northern Suburbs. It carries out approximately 3,000 jobs each year and has an annual turnover of in excess of $1 million.
The Company employs five licensed electricians in addition to Mr Hutchings, as well as two apprentices.
To obtain new business, the Company distributes leaflets promoting the supply and installation of safety switches for a fixed price of $99. Clients who respond to this promotion would also receive a "10 point safety check", which later became a "157 point safety check". During these safety checks, the Company's electrician would make a visual check of the house's wiring installation to detect for any faults. The rectification of these faults would be at an additional cost to the consumer.
When interviewed by departmental investigators on 4 February 2001, Mr Hutchings agreed that the use of the offer to fit safety switches was "to build up business". He agreed that the supply and installation of the safety switches for $99 was done at a loss to the Company. He also agreed that his employed electricians were on wages, but could gain an additional 3% commission for any accepted quote for additional work.
When Mr Hutchings was absent on holidays, either Mr S Marsh or Mr D Thorpe were left in charge of the Company. Mr Thorpe had commenced negotiations with Mr Hutchings to establish a partnership, which would operate within the Eastern Suburbs of Sydney.
The Department's investigation focussed upon six separate sites where the Company provided work. A departmental inspector assessed each site. The inspector is a licensed electrician who possesses extensive practical residential electrical wiring experience. Each site was assessed with particular attention focused upon the house's switchboard and its internal wiring. In each case, an installation inspector from Energy Australia independently assessed the work. These inspections focused primarily upon the house's switchboard.
The investigation also revealed that Energy Australia had issued an unacceptable number of defect notices to the Company since January 2001.
The facts relating to each site and the issuance of the defect notices are summarised as follows:-
1. 12 Wellman Road, Forestville
On 15 January 2001 Mr D and Mrs N Weber received a leaflet from the Company and engaged it to carry out the installation of a safety switch. The couple had not previously experienced any problems with their house's electrical installation.
Upon arrival at the site, one of the Company's electricians, Mr S Marsh conducted a safety inspection and stated that there were a number of dangerous faults in the wiring that required immediate attention. He prepared a quote for $1,962, which was accepted.
On 22 January 2001 another electrician employed by the Company Mr C Mathieson attended the site to carry out the previously quoted work. Before commencing, he identified an immediate need to re-wire all of the power circuits, which were covered by rubber installation material. An additional quote of $1,690 was prepared and was also accepted.
During May 2001 Mr and Mrs Weber lodged a complaint against the Company with the Department.
On 25 July 2001 a departmental inspector carried out an assessment of the site. He observed ten instances where electrical work had been carried out contrary to AS/NZS 3000:2000 (Clauses 1.7.3, 1.7.7, 1.10.1, 3.9.4.1, 3.10.3.5, 5.4.1, 5.7.3.4 and 5.8.3).
In the inspector's view the Company's failure to comply with AS/NZS 3000:2000 significantly increased the exposure of the house’s occupants to suffer injury from electrical shock and damage to the house through fire.
On 22 October 2001 an Energy Australia installation inspector carried out an inspection. Five instances were observed where the work failed to comply with AS/NZS 3000:2000 (Clauses 1.10.1, 2.9.4.4 and 3.9). The inspector issued a defect notice to the Company, which required it to rectify the stated defects within a 21 day period.
2. 77 Ellery Parade, Seaforth
On 27 March 2000 Mr D Taylor and Ms G Mathews engaged the Company to inspect their house to determine why the safety switch tripped periodically. They were also concerned that various light globes frequently blew and Ms Mathews occasionally received electric shocks from the VCR.
Mr Hutchings, on behalf of the Company attended the site and carried out an inspection. He stated that the house required immediate re-wiring, as it presented a danger to the occupants' children. Mr Taylor and Ms Mathews, concerned for the safety of their children accepted the quote and work was commenced immediately. The value of the contract was $8,935.
Mr C Mathieson for the Company completed the work.
Mr Taylor was dissatisfied with the standard of the work provided, as the pre-existing problems continued to occur after the work had been completed. He was also concerned when he was charged an additional $795 for the installation of new power points, which Mr Mathieson had advised would be included in the previously quoted price.
During May 2000, Mr Taylor received a certificate dated 27 March 2000 evidencing the existence of home warranty insurance to cover the work carried out in his house. The contractor should have provided the certificate prior to the commencement of any work.
On 7 August 2000 Mr Taylor lodged a complaint against the Company to the Department. On the same date, an Energy Australia installation inspector carried out an inspection of the site. He observed 2 instances where the work failed to comply with AS/NZS 3000:2000 (Clauses 2.5.3.1 and 3.9.4.3) and two instances where the work failed to comply with the NSW Service and Installation Rules (Rules 1.9.8 and 4.13). The inspector issued a defect notice to the Company, which required it to rectify the stated defects within a 21 day period.
The defected work was not rectified within the stipulated period causing Energy Australia to issue a disconnection notice to house's occupants on 17 October 2000.
On 3 October 2001 a departmental inspector carried out an assessment of the site. He observed 9 instances where electrical work had been carried out contrary to AS/NZS 3000:2000 (Clauses 1.7.7, 2.9.4.4, 2.9.6, 3.7.2.4, 3.9.40.1, 3.9.4.3, 3.10.3.5, 5.4.1 and 5.7.3.4).
According to Mr Taylor, the problem with the tripping of the safety switch was corrected following the replacement of an iron.
3. 53 Darley Street, Forestville
On 1 December 2000 Mrs Hyde contacted the Company as her house had temporarily lost its power supply. Mr and Mrs Hyde had previously dealt with the Company in 1999 when one of its employees replaced an oven.
The Company sent Mr S Marsh to the house. He inspected the site and prepared a quote for electrical work to be carried out. The value of the quote initially was $1,520. The work was described as the re-wiring of four power circuits, the wire in the downstairs areas were to be covered in PVC conduit and any power points would be replaced where required. The work was to take 8 days and would involve two men during this period. According to Mr and Mrs Hyde, they were under the belief that it was an emergency repair.
After Mr Hyde accepted the quote and work had commenced, Mr Marsh stated that he had mistakenly left off a zero on the quote and in fact, the quote should have been for $15,200. Mr Hyde agreed to this amended quote and authorised the Company to deduct $7,500 from his credit card account as the initial payment.
On 8 December 2000 a company representative deducted a further $7,500 from Mr and Mrs Hyde's credit card. This deduction had been made without prior authorisation. When Mr Hyde enquired as to why this deduction had been made, Mr Hutchings informed him that it was due as the work was almost complete.
After the work was complete, the safety switch continued to trip. During March 2001 Mr and Mrs Hyde replaced their refrigerator. After this, the safety switch did not trip.
On 3 May 2001 Mr Hyde was dissatisfied with the cost of and the stated necessity for the work and lodged a complaint with the Department.
During the course of the Department's investigation it was determined that the Company had failed to provide home warranty insurance coverage for this work. When interviewed, Mr Hutchings stated that this had occurred due to a clerical error.
On 3 October 2001 a departmental inspector carried out an assessment of the site. He observed 5 instances where electrical work had been performed contrary to AS/NZS 3000:2000 (Clauses 2.9.4.2, 5.5.4.2, and 5.8.3.1).
In the view of the inspector, the defects were likely to present as an unacceptable increase in the risk of the house's occupants sustaining a shock or death.
On 22 October 2001 an Energy Australia installation inspector carried out an inspection of the site. He observed 7 instances where the work failed to comply with AS/NZS 3000:2000 (2.8.3.3.3, 2.9.4.2, 2.9.4.4, 5.5.4.2, 2.9.2, and 3.7.2.2). The inspector issued a defect notice to the Company, which required it to rectify the stated defects within 21 days. These defects were rectified within this period.
4. 21 Valley Road, Balgowlah Heights
On 4 May 1999 Mr Hutchings, on behalf of the Company contracted with Ms W Pruden to install a surge diverter, a circuit breaker switchboard and replace a movement detector at the rear of the house as well as re-wire a number of switches and lights. The value of the contract was $1,350.
On 6 May 1999 Mr Hutchings advised Ms Pruden that her house required re-wiring at a cost of $4,500. She did not proceed with the work after receiving different independent advice from two other electrical contractors who had inspected the house's installation.
During February 2000 Ms Pruden lodged a complaint against the Company with the Department.
On 24 September 2001 a departmental inspector carried out an assessment of the site. He observed that the wiring was serviceable and in his view did not require replacement. He also observed 5 instances where electrical work attributable to the Company had been carried out contrary to AS 3000:1991 (Clauses 2.23.5.4, 5.8.2.1, and 5.8.2.4).
On 22 October 2001 an Energy Australia installation inspector carried out an inspection of the site. He observed 5 instances where the work failed to comply with AS/NZS 3000:2000 (Clauses 2.9.4.4, 5.5.1 and 5.6.1). The inspector issued a defect notice to the Company, which required it to rectify the stated defects within a 21 day period.
5. 17 Bedford Crescent, Collaroy
On 4 May 2001 Mr J Murphy and Ms M Cutcliffe arranged for the Company to install a safety switch in their house. Mr Hutchings attended and following an inspection stated that there was a need for two circuit breaker switchboards with safety switches as well as two surge diverters to be installed for the total cost of $1,427. The house, though relatively small had previously been wired as two separate flats and had two meter boxes.
At the time of presenting the quotation, according to Ms Cutcliffe, Mr Hutchings highlighted the urgency of the work by referring to the need for her to keep her children safe. On this basis she agreed to have the work carried out.
On 10 May 2001 Mr S Marsh, another electrician employed by the Company arrived to carry out the work. The electrician carried out another inspection and stated that the work could not be done, as the house needed immediate re-wiring at a cost of in excess of $8,000. He stated that it was a seriously dangerous situation. When Ms Cutcliffe stated that the cost of the work was high, Mr Marsh proposed the alternative, that he could fault find the installation to identify the problem at the cost of $45 per half hour per man. Ms Cutcliffe agreed to the latter course. At the end of the day she was presented with an invoice for $396.
On 16 May 2001 Mr Murphy, on behalf of Ms Cutcliffe lodged a complaint against the Company with the Department.
On 26 September 2001 a departmental inspector carried out an assessment of the site. He observed that the majority of the house's wiring was serviceable and did not require replacement. The inspector tested the installation and determined that the reason why the safety switches did not work was that the installing electrician had incorrectly wired them. The test, in the view of the inspector was a basic one that any competent electrician would perform in similar circumstances. At the time that this inspection occurred, an installation inspector from Energy Australia accompanied the Department's inspector.
6. 5/1 Bond Street, Mosman
During August 2000 Mr Hutchings, on behalf of the Company contracted with Ms L Louisson to install a larger capacity cable to supply electricity to a kitchen cooktop. When used, the appliance would trip the unit's circuit breaker. Mr Hutchings stated to Ms Louisson that the existing cable was inadequate to meet the load of the hotplates and cooktop and that a larger capacity cable was required to rectify the problem. The combined load of the hotplates and the oven was 35 amps, whilst the circuit and the circuit breaker was of 25 amps capacity.
On 14 September 2000 the Company carried out the work, but left the cooktop disconnected. The Company charged Ms Louisson $583 for this work. The Company then refused to connect the cooktop until she paid an additional $77. In the Company's view, one of the hot plate elements required replacement.
On 29 September 2000 the work was completed and the appliance connected.
Ms Louisson experienced the same problem with use of the cooktop tripping the circuit breaker. She contacted the Company and Mr Hutchings advised her that he was not responsible and that rectification would require further payment.
During November 2000 Ms Louisson lodged a complaint against the Company with the Department. She had received advice from another electrician that the pre-existing cable was not the cause of the problem and that there was no need for the work to have been provided by the Company. Faulty hotplate elements were replaced and the circuit breaker ceased to trip when the hotplates and oven were used.
Ms Louisson also lodged an application against the Company before the then Fair Trading Tribunal. It subsequently found in Ms Louisson's favour and ordered the Company to pay her $1,735.
On 21 December 2001 a departmental inspector carried out an assessment of the site. During the course of the physical assessment he observed that the cooktop had not been adequately earthed contrary to AS/NZS 3000:2000 (Clause 5.2.2).
Defect Notices issued by Energy Australia
The Department was provided with information from Energy Australia relating to the conduct of the Company.
According to records maintained by Energy Australia, the Company, between 1 January 2001 to 21 March 2002 submitted 790 notifications of electrical work (NOEWs).
There is a statutory obligation upon all installing electricians who have undertaken work to submit a NOEW to the relevant electricity supply authority within 14 days of the completion of electrical installation in accordance with clause 9 of the Electrical Safety (Electrical Installations) Regulations, 1998.
The electricity supply authority has an obligation under a nationally based safety regime to conduct random inspections of work which has been brought to its attention through the submission of NOEWs.
Of the NOEWs submitted by the Company, Energy Australia inspected 87 sites. Energy Australia operates on a policy of inspecting approximately 10% of the total number of submitted NOEWs. As a result of these inspections it issued 28 defect notices to the Company. A defect notice requires the Company to rectify, at its own cost specified aspects of the work within a 21 day period or sooner if the work is classified as being a major defect.
Further information provided to the Department by Energy Australia revealed that between March 2002 to August 2002, it conducted 196 inspections of sites where the Company had submitted NOEWs. Of these sites, a further 24 defect notices were issued. This was after the Company's electricians attended a two day refresher course which focused upon safety and testing procedures.
On 4 February 2002 Mr Hutchings participated in a taped recorded interview with Departmental investigators. During the interview, Mr Hutchings admitted: -
(a) the Company had circulated leaflets that did not comply with the statutory requirements of Clause 63(c)(ii) of the Home Building Regulations, 1997 ("the Regulations"), in that the leaflet failed to include the Company's licence number,
(b) electricians employed by the Company engaged in the provision of defective work, in that when inspected specified work was contrary to AS 3000:1991, AS/NZS 3000:2000 and the NSW Service and Installation Rules. By engaging in work contrary to AS/NZS 3000:2000, the Company had contravened Clause 7 of the Electricity Safety (Electrical Installations) Regulations, 1998. By failing to comply with the Rules, the Company contravened Clause 16 of the Electricity Safety (Safety Plans) Regulations, 1997.
In the Interview, Mr Hutchings disputed the accuracy of some of the defects that had been identified by the Energy Australia's inspectors and the Department's inspector and attributed to the Company's employees. Of the accepted defects, he stated that though all defects could be potentially dangerous, these were of a minor nature, which could be easily rectified.
Determination
I have considered the material that has been provided to me.
I have determined that there are sufficient grounds to find that Hutchings Electrical Pty Limited was guilty of improper conduct under sections 51(1)(a), (b) and (c) of the Act. The Company has committed offences against the Act and the Regulations. In that it failed to provide home warranty insurance within accordance with section 92, its contracts failed to comply with section 7, in that the work was not sufficiently described and its promotional advertising failed to include its licence number contrary to Clause 63.
Licensed electricians employed by the Company were required to carry out the work. This work must be done in accordance with the relevant legislation for the work such the Electrical Safety (Electrical Installations) Regulations, 1998. By failing to adequately test the work and by doing work that is defective the Company's employees have failed to comply with the requirements of another Act. Similarly, all residential building work, inclusive of specialist work must be carried out in accordance with the implied statutory warranties. The work carried out by the Company's employees breached two of these statutory warranties implied contrary to sections 18B(a) and (c) of the Act, in that all residential building work shall be carried out to a proper and workmanlike manner and in compliance with any other law.
I am not satisfied that the Company did all that it could have to ensure that its nominated supervisor, Mr Hutchings exercised sufficient control over its employees' work.
I further determine that there are sufficient grounds to find that Mr Hutchings, as the nominated qualified supervisor for Hutchings Electrical Pty Limited was also guilty of improper conduct under sections 53(1)(a), (b) and (c) of the Act. Mr Hutchings was under a statutory obligation to exercise all due diligence to prevent the Company's employees from performing work not in accordance with the Act and any other relevant legislation and that the work must be carried out to the requisite standard.
I also determine that Mr Hutchings was guilty of improper conduct under section 54(1) of the Act. As an officer of a corporation that held a licence, he had a statutory obligation to ensure that the corporation did not engage in improper conduct as defined under section 51 of the Act.
In accordance with sections 56 and 57 of the Act, I am satisfied that there are reasonable grounds to take disciplinary action against both Hutchings Electrical Pty Limited and Mr Hutchings.
Matters for consideration
Two complementary and equally troubling patterns emerge in respect of the Company's method of doing business.
First, there has been a high level of defective work carried out by the Company. The number of defects detected by Energy Australia during the course of its inspections is of concern. It demonstrates that there has been insufficient care taken by the Company and its employees in carrying out this work. The view that most of these are minor defects and that they can be rectified is not a sufficient answer. There is an obligation on the Company to carry out the work properly in the first place. There is an obligation on Mr Hutchings as the Company's nominated supervisor to ensure that work is done competently and in accordance with the requirements of relevant standards and legislation.
The high level of defective work carried out by the Company indicates that there is a serious failing in relation to this aspect of its operations. I am of the view that this is a systemic issue that affects an unacceptably high proportion of the Company's operations.
Second, and of even greater concern, there are issues that go to the heart of the Company's probity and integrity. The Company has engaged in a practice of providing quotes for work and then, once they have been contracted to do work for a consumer, asserting a need for extensive and expensive additional work to be done. In some cases this assertion as to the need for additional work has been accompanied by reference to the importance of making the electrical installation safe for the consumer's children.
There is substantial evidence, which I accept, that there was no need for much of this work. In each case where the assertion was made that additional work was required there was a very significant increase in the cost of the work.
I am satisfied that this was a deliberate ploy by the Company to generate additional revenue. The practice of falsely representing that there is a need for work to be done is prohibited by the Fair Trading Act, 1987. I am of the view that this practice by the Company is potentially more harmful to consumer interests that those instances of minor defective work carried out by the Company.
Consumers should be able to rely upon the competence, judgement and honesty of specialist tradespersons when providing advice and recommendations as to the need for work to be done. Indeed unlike many other aspects of home building a consumer is never entitled to do electrical work themselves and a significant safety regime involving suppliers, distributors electricians and regulators is in place to ensure the safety of consumers. The Company has taken advantage of consumers' perceptions that the Company and its representatives have specialised knowledge of electricity. The Company and its representatives have taken advantage of consumers' perceptions that electricity is inherently dangerous and they have taken advantage of consumers' perceptions that it is imprudent to ignore faulty electrical installations.
I am satisfied that the Company has engaged in predatory conduct where it took advantage of its position as a licensee in an area of specialist work and misrepresented to consumers the need for such specialist work to be carried out by them.
I view that conduct as being most grave.
Mr Hutchings is ultimately responsible for the standard of work provided by the Company's employees. I note that due to the specialist nature of electrical work each employee who carries out the work must be licensed in their own right or be personally supervised by someone who does hold the requisite category of licence. This does not remove the accountability of Mr Hutchings as the Company's nominated supervisor.
During his interview with departmental investigators, Mr Hutchings agreed that specific work performed by the Company's electricians was defective. He agreed that he was responsible for all facets of the Company's operation, in particular its "technical running". He stated that defects were "oversights" and "...are not acceptable..." within the Company's operation. He described the procedures that were in place to monitor the work of the Company's electricians. He further stated that his electricians knew that the "...ramifications of poor workmanship is a formal warning which can result in termination, yet despite his employee's work being defected by the supply authority there is no evidence that any electrician received anything more than a reprimand was disciplined.
Additionally, Mr Hutchings attempts to mitigate the severity of the Company's conduct by stating that the detected defects were of a minor nature. I cannot accept this view. The Company's clients are entitled to receive work that is of the requisite standard. Indeed, a statutory obligation is placed on all installing contractors to ensure that the work is safe and appropriate for use. To this end, electricians are trained to test their own work and to certify as to its compliance. The Company arranged for its electricians to undergo a refresher course on testing procedures in February 2002. Notwithstanding their attendance, their work was still found to be defective.
Mr Hutchings' failure to ensure that the requisite standard of work is maintained indicates that he is either unwilling to act diligently in this regard, or is incapable of providing an adequate level of supervision. He has unsuccessfully attempted to deflect the blame for his failure to provide adequate supervision on others. Mr Hutchings submitted that the accuracy of the Energy Australia inspectors' trade related knowledge is inadequate and that this has contributed to a number of defects having been withdrawn after he has disputed them. He further submitted that the number of defect notices issued to a licensed contractor is an ineffective guide as the contractor's competency on that basis.
When interviewed Mr Hutchings agreed that on two separate occasions the Company failed in its statutory duty to provide to its clients home warranty insurance in accordance with section 92 of the Act. In one case, the certificate evidencing the existence of home warranty insurance was not provided within the time stipulated. The certificate was provided after the work had been completed.
Whilst in the second case, the Company failed totally to provide home warranty insurance. Mr Hutchings explained that this had resulted from a clerical error and that a new protocol had been instigated to prevent this from occurring in future.
Failure to provide home warranty insurance is a serious contravention of the Act.
Both the Company and Mr Hutchings have been previously placed on notice by the Department for the need to adequately supervise the work carried out by its electricians. Similarly, prior notice was provided for the Company to sufficiently describe the work to be carried out in accordance with section 7 of the Act.
Neither appears to have benefited by the leniency that has been previously extended by the Department through the use of formal cautions.
As the Company's nominated supervisor Mr Hutchings is expected to demonstrate the characteristics of honesty, the possession of trade related competence and knowledge. I am of the view that the Department's investigation has found him to be lacking in each of these characteristics.
I have carefully examined all aspects of these matters. I note that Mr Hutchings has submitted that regard should be had to the fact that all defects have been rectified. My concern is that defects are still being detected in the Company's electricians' work. I have paid close regard to the impact that my decision will have upon the Company, its employees and in particular that of Mr Hutchings and his family. I am aware that, unlike other areas of home building, the loss of a licence for an electrician results in that licensee being unable to work in their chosen trade.
However, in light of my view that there are overlapping patterns of misconduct that go to both the competence of the Company and its representatives and to their honesty and integrity I believe that I have no alternative but to deal with this matter in a manner that will have a serious affect on both the Company and on Mr Hutchings."
5 With respect to Mr Hutchings that Notice of Decision provided:
"I have determined this matter in accordance with section 62 of the Home Building Act, 1989 ("the Act"). The reasons for my determination are contained in the attached document. You will note that I am satisfied that you engaged in improper conduct as defined in sections 53(1)(a), (b) and (c) and section 54(1) of the Act.
You should also note that the supervisor's certificate issued to you has been cancelled and you have been disqualified for a period of ten 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, or
(c) an officer of a corporation that is the holder of an authority. Such period of disqualification is to take effect from 10 March 2003.
You should further note that I have determined that you must pay to the Department's Director-General, as a penalty, an amount of $5,000 within a period of 28 days of the date of this Notice."
6 With respect to the Company the Notice of Decision provided:
"I have determined this matter in accordance with section 62 of the Home Building Act, 1989 ("the Act"). The reasons for my determination are contained in the attached document. You will note that I am satisfied that the Company engaged in improper conduct as defined in sections 51(1)(a), (b) and (c) the Act.
You should also note that the contractor licence issued to the Company has been cancelled and that the Company has been permanently disqualified 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, or
(c) an officer of a corporation that is the holder of an authority. Such period of disqualification is to take effect from 10 March 2003."
7 Each of the Applicants sought an internal review of the decisions and that review was undertaken by Mr Lindsay Le Compte, the General Manager of the Office of Home Building for the Department of Fair Trading. Mr Le Compte provided a statement of reasons for his decision dated 21 March 2003 and made findings in the following terms:
"Findings:
It must be acknowledged that electrical installation work carries with it an inherent potential to endanger human safety and damage to property. Even the most minor diversion from the established procedures has the potential to produce fatal results.
I have examined Mr Hutchings' statement dated 13 February 2003 and its supporting documents. I find no new material that was not previously provided to the Delegate. I do note that Mr Hutchings has provided some additional material that attempts to clarify some aspects of his previous submissions.
I note that there are a number of issues that do require clarification in this matter. However, these issues do not detract from the Delegate's findings.
First, Mr Hutchings submits that a number of defects issued to the Company should not have been issued. He submits that the Company in some instances repaired existing installations and as such the incorrect work standard was applied. In support of this submission, Mr Hutchings refers to a publication entitled "Guide to the Inspection of Consumers' Electrical Installations". I note that Mr Hutchings did not provide a copy of this document to the Department with his statement.
The reference taken from this publication at Clause 6.1, according to Mr Hutchings is that "installation work should be to the standard of the Wiring Rules edition applicable with the material currently in use".
It is the Department's position that the current guidelines for use in inspecting consumer installations are as follows: -
Australian/New Zealand Standard (AS/NZS) 3000/2000 referred to as the Wiring Rules,
Recommended Standard Inspection Procedures for Existing Electrical Installations, issued June 1981 and
AS/NZS 3017/2001 -Electrical Installations -Testing and Inspection Guidelines.
I find that the work described as defects and carried out by the Company falls within the categories of alterations or additions to an existing installation. The work could not be categorised as repairs. A repair is the replacement of an existing item such as a powerpoint or a fuse base on the switchboard. This work category does not require the submission of a Notification of Electrical Work (NOEW) to the Network Operator.
The installation of a safety switch on the main switchboard is an alteration as such it requires the submission of a NOEW.
According to Clause 1.5 Alterations, Additions and Repairs, AS/NZS 3000/2000 "every alteration of, or addition to, an existing electrical installation shall be deemed to be a new electrical installation and all relevant provisions of this Standard shall apply to every such alteration or addition". "Repairs to existing electrical installations or parts thereof may be effected using methods that were acceptable when the part of the installation was originally installed, provided that the methods satisfy the fundamental safety principles of Section 1 of the Standard."
Secondly, contrary to Mr Hutchings' submission no "additional licence is required to do mains and metering work". This type of work is referred to within the industry as contestable work. Any licensed electrical contractor can wire the installation's switchboard and install the consumer's mains, however only the Network Operator or an Authorised Service Provider (APS) can connect the consumer mains. Any licensed electrical contractor who possesses suitable training and trade competency can seek the accreditation from the Network Operator to be an APS.
The Company has either elected not to seek such additional accreditation or has had its application refused by the Network Operator. In any event, the Company has engaged another contractor who has APS accreditation as its sub-contractor. The sub-contractor has carried out the work under the supervision of the Company's nominated supervisor, Mr Hutchings. Though not accredited to do the work himself, as the Company's nominated supervisor he is ultimately responsible for the standard of work provided by its sub-contractor. I note that Mr Hutchings now accepts this responsibility as he submits that "we have now altered our policy so that checks are made on any work contracted out."
Thirdly, Clause 6.3.2 of AS/NZS 3000/2000 and Clause 1.4 of AS/NZS 3017/1996 requires that an installation be mandatory tested for the following: -
Continuity of the Earthing system,
Insulation Resistance,
Polarity and
Correct Circuit Connections.
The defective work provided by the Company, whether it is classified as minor or major for the purposes of the Network Operator is a breach of the implied statutory warranties as set down in section 18B of the Act.
I note that Mr Hutchings has submitted that he and the Company should gain some benefit from the efforts to reduce the ratio of defects detected by the Network Operator to the number of sites where the Company has carried out work. Both the Company and Mr Hutchings are now aware that its work should have been tested. The successful self-regulation of this industry is reliant upon electrical contractors testing their own work. The occurrence of an overwhelming majority of these identified defects would have been eliminated should the Company had of complied with its testing obligations under AS/NZS 3000/2000. It is inappropriate for Mr Hutchings to regard Energy Australia as the Company's quality assessor. This is his role and he has failed to carry it out with all due diligence.
I further note that Mr Hutchings' submission does not address why, after taking all of these steps to establish a new procedure to specifically address a reduction in the Company's defect ratio, that the Network Operator could between August 2002 and December 2002 identify defects present at another eight sites.
I agree with the Delegate's findings and share his concerns with both the high incidence of defective work provided by the Company and its unacceptable practice of providing quotations for work where the need for some of the work was falsely represented. I am of the view that Mr Hutchings could have easily rectified both of these concerns, but has elected not too. Both the Company and Mr Hutchings were under statutory obligations to ensure that the work was tested for safety and compliance. The evidence indicates this did not occur.
It is a reasonable expectation that the Company would have instructed its employees to prepare fully itemised quotations for its clients. The evidence indicates this did not occur. I am of the view that to not do so was to take an unfair advantage of its clients at a traumatic time when they were looking to the Company for assistance.
I note the view taken by the Administrative Decisions Tribunal in setting aside the decisions of the Director-General to suspend the licences of both the Company and Mr Hutchings. I do not agree with Mr Hutchings' submission that the Tribunal's finding necessarily renders the continued incidence of defective work as not being a significant concern. Each defect detected in the work provided by the Company constitutes a breach of the implied statutory warranties as set down in section 18B of the Act.
I do not agree that the attendance of employees at a two day refresher course could constitute evidence of "regular training".
I find the misconduct of the Company and of Mr Hutchings to be particularly troubling. Mr Hutchings has had principal responsibility for this conduct. I am unable to find any genuine attempt by either to properly address the Department's justified concerns. I have approached the Delegate's decision to remove Mr Hutching's immediate ability to work in his chosen career and the direct and indirect impact that this will have on other parties with careful consideration. I find that the Company's systemic conduct in engaging in defective work over a long period together with the false representations made by its employees as to the need for some work to occur merits decisive action to ensure future protection to the community.
Conclusion:
I find that there was sufficient basis upon which the Director-General's Delegate served Notices to show cause upon the Company and Mr Steven Hutchings. I affirm the decision of the Delegate that both were guilty of improper conduct.
I further agree with the Delegate's findings that it was appropriate that disciplinary action be taken against both Mr Hutchings and the Company under section 62 of the Act.
I affirm the Delegate's decision to cancel the authorities of Hutchings Electrical Pty Limited and Mr Hutchings and to permanently disqualify the former and to disqualify the latter for a period of ten years. I additionally affirm the Delegate's decision to order Mr Hutchings to pay a penalty of $5,000, however as the period under which payment was to be made has now expired I vary the decision to enable him to make payment by 28 April 2003."
8 On 11 April 2003, the Company and Mr Hutchings lodged applications for review of the Commissioner's decisions with the Tribunal. The matters were heard together between 28 and 31 July 2003. At the conclusion of the hearing the decisions were reserved. These are the reasons for decisions with respect to those applications.
Legislation
9 The Home Building Act 1989 makes provision for the regulation of residential building work and specialist work. Part of this regulative scheme is the provision of licences and certificates to do such work. Section 4 of the Act provides that a person is prohibited from contracting to do residential building work or specialist work on behalf of an individual, partnership or corporation unless that person is the holder of a licence authorising that person to contract to do that work.
10 Section 56 specifies the grounds upon which the Commissioner may take disciplinary action against the holder of a contractor licence. Section 57 specifies the grounds upon which the Commissioner may take disciplinary action against the holder of a supervisor or tradesperson certificate. Those sections provide:
"56 Grounds for taking disciplinary action against holder of a contractor licence
The Director-General may take disciplinary action under section 62 against the holder of a contractor licence on any of the following grounds:
(a) that the holder is not entitled to hold the contractor licence,
(b) that the holder is not fit to hold the contractor licence,
(c) that the holder is guilty of improper conduct,
(d) that there is not a sufficient number of nominated supervisors to ensure:
(i) that the statutory warranties for residential building work are complied with, or
(ii) that specialist work is done in a good and skilful manner and that good and suitable materials are used in doing the work, or
(iii) that the requirements applicable to the work made by or under this or any other Act in respect of residential building work or specialist work are complied with,
(e) in the case of a holder of a contractor licence that is a partnership--that any of the members of the partnership, or any of the officers of a corporation that is a member of the partnership, is not a fit and proper person to be a member of the partnership or an officer of the corporation or has been guilty of improper conduct,
(f) in the case of the holder of a contractor licence that is a corporation--that any of the officers of the corporation is not a fit and proper person to be an officer of the corporation or has been guilty of improper conduct,
(g) that the holder has failed to comply with a condition of the contractor licence imposed by a determination under this Part.
57 Grounds for taking disciplinary action against holder of a supervisor or tradesperson certificate
The Director-General may take disciplinary action under section 62 against the holder of a supervisor or tradesperson certificate on any of the following grounds:
(a) that the holder is not entitled to hold the certificate,
(b) that the holder is not fit to hold the certificate,
(c) that the holder is guilty of improper conduct,
(d) that the holder is not capable of doing all or part of the work that the certificate authorises the holder to do,
(e) that the holder has failed to comply with a condition of the certificate imposed by a determination under this Part."
11 Section 51 makes provision regarding improper conduct generally. It provides:
"51 Improper conduct: generally
(1) A holder of a licence who is authorised by the licence to contract to do residential building work or specialist work, or a holder of a supervisor or tradesperson certificate, is guilty of improper conduct if the holder:
(a) commits an offence against this Act or the regulations, whether or not an information has been laid for the offence, or
(b) without reasonable cause, does not comply with the requirements of a rectification order under Division 2 of Part 3A, or
(c) breaches a statutory warranty, or
(d) in the case of specialist work, does the work otherwise than in a good and workmanlike manner or knowingly uses faulty or unsuitable materials in the course of doing the work.
(1A) The holder of a licence who is authorised by the licence to contract to supply kit homes is guilty of improper conduct if the holder:
(a) commits an offence against this Act or the regulations, whether or not an information has been laid for the offence, or
(b) without reasonable cause, breaches a contract to supply any kit home that the licence authorises the holder to contract to supply.
(2) The holder of a licence is guilty of improper conduct if the holder:
(a) without reasonable cause, breaches a contract to do any work that the licence authorises the holder to contract to do, or
(b) without reasonable cause, does not comply with the requirements of a rectification order under Division 2 of Part 3A, or
(c) does not comply with an order of the Tribunal, or
(d)
(e) commits fraud or makes any misrepresentation in connection with any contract authorised by the licence or any contract for the sale of any dwelling, structure or work that has resulted from, or been affected by, any work done under the authority of the licence, or
(f) is convicted of any offence under the Workers Compensation Act 1987 or the Workplace Injury Management and Workers Compensation Act 1998 or any regulations made under either of those Acts.
(3) It is a sufficient defence to a complaint that the holder of a licence has been guilty of improper conduct as referred to in subsection (1) (b), (c) or (d) in connection with work undertaken by the holder, if the holder proves to the satisfaction of the Director-General that the holder did all that could reasonably be required to ensure that a nominated supervisor for that work would exercise such degree of control over the doing of the work as would be necessary to prevent the occurrence of the improper conduct."
12 Section 53 makes provision regarding improper conduct by nominated supervisors. It provides:
"53 Improper conduct: nominated supervisors
(1) The holder of an endorsed contractor licence or a supervisor certificate who has control over the carrying out of residential building work or specialist work of any kind is guilty of improper conduct if:
(a) the requirements applicable to the work made by or under this Act or any other Act are not complied with, or
(b) a breach of a statutory warranty occurs in the course of doing that work, or
(c) in the case of specialist work, the work is done otherwise than in a good and workmanlike manner or faulty or unsuitable materials are used in the course of doing the work.
(2) The holder of an endorsed contractor licence or a supervisor certificate is to be presumed, in the absence of evidence to the contrary, to have control over the doing of all work for which the holder is a nominated supervisor.
(3) It is a sufficient defence to a complaint that a holder has been guilty of improper conduct under this section if the holder proves to the satisfaction of the Director-General that the holder used all due diligence to prevent the occurrence of the improper conduct."
13 Section 54 makes provision regarding improper conduct by nominated supervisors. Section 54(1) provides:
"54 Improper conduct: members of partnerships or officers of corporations
(1) An individual who is a member of a partnership or an officer of a corporation that is the holder of a licence is guilty of improper conduct if the holder does any of the things referred to in section 51 or 52."
14 Section 61 provides for the issue of a show cause notice by the Commissioner, where 'there are reasonable grounds for believing that there are grounds for taking disciplinary action', and for the holder of a contractor licence to make submissions in response. In part that section provides:
"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."
15 Section 62 specifies the Commissioner's powers when satisfied that there are grounds to take disciplinary action:
"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."
16 Section 83B of the Act provides for a right of review of decisions made by the Commissioner to the Tribunal:
"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.
(4) For the purposes of this section, the Director-General is to be taken to have refused any application that has not been withdrawn if the Director-General has not served on the applicant notice of the decision on the application:
(a) within 40 days of its being lodged at an office of the Department of Fair Trading, or
(b) if the Director-General and the applicant agree on a longer period--within the longer period after its being so lodged."
17 Regulation 58A(3) of the Home Building Regulation 1997 ("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)."
18 These provisions combine with s.38 of the Administrative Decisions Tribunal Act 1997 ("the ADT Act") to give the Tribunal jurisdiction to review the Commissioner's decisions.
19 It is the Tribunal's task in determining the review to make the correct and preferable decision. Section 63 of the ADT Act provides:
"63 Determination of review by Tribunal
(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:
(a) any relevant factual material,
(b) any applicable written or unwritten law.
(2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision.
(3) In determining an application for the review of a reviewable decision, the Tribunal may decide:
(a) to affirm the reviewable decision, or
(b) to vary the reviewable decision, or
(c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or
(d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal."
Material Before The Tribunal
20 Several volumes of material are in evidence. The evidence tendered by the Applicants consisted of statements by Mr Hutchings and former employees of the Company Mr Stephen Marsh or Mr David Thorpe. These statements provide evidence with respect to the general business operations and also address the specific allegations with respect to the work undertaken at:
12 Wellman Road, Forestville, 2087 (owned by Douglas and Nona Weber)
77 Ellery Parade, Seaforth, 2092 (owned by Donald Taylor and Glynis Matthews)
53 Darley Street, Forestville, 2087 (owned by James and Maureen Hyde)
21 Valley Road, Balgowlah Heights, 2093 (owned by Wilga Pruden)
17 Bedford Crescent, Collaroy, 2097 (owned by Meagan Cutcliffe and Joseph Murphy)
Unit 5, 1 Bond Street, Mosman, 2088 (owned by Lourdes Louisson)
21 Mr Hutchings provided a detailed statement dated 17 October 2002 in response to the Notice to Show Cause, and a further detailed statement dated 23 February 2003 in response to Mr Hanlon’s decision. He provided a further statement dated 27 July 2003 in response to comments made by Mr Peter King, an Investigator with the Department of Fair Trading in response to Mr Hutchings’ 23 February 2003 statement. Mr Hutchings also provided statements in regard to specific sites which are the subject of the Show Cause Notices. Mr Hutchings attended the hearing and was subjected to cross-examination.
22 The documentary evidence tendered by the Commissioner consisted of three volumes of documents. Much of this material was excluded following Mr Davie’s objection. My reasons for excluding that material were given during the hearing and I do not propose to restate them here. Defect Notices issued by Energy Australia were admitted subject to weight. In addition to the material in the three volumes, the Commissioner relied on an affidavit by Mr John Mazey, an Installation Inspector with Energy Australia.
23 Included in the Commissioner’s evidence is a report by Mr King dated 2 July 2002. At the time of writing his report Mr King had over 32 years experience in the electrical industry involved in electrical installation, inspection and testing. He holds a current electrician's licence. He was certified as Low and High Voltage Inspector by The Sydney County Council and Sydney Electricity. He carried out electrical inspections of the installations that are the subject of these proceedings for the purpose of providing his opinion concerning compliance with the applicable Australian/New Zealand standards and the need for work as determined by the Company. Mr King provided a further report dated 10 March 2003 which was in response to Mr Hutchings’ statement provided in response to the Notice to Show Cause.
24 Mr King was accepted as an expert witness. He appeared and gave evidence at the hearing and was subjected to cross-examination.
25 Mr Davie sought to have much of Mr King’s report exclude on the basis that the document contained a mixture of hearsay, submissions, unqualified and expert opinion that was inadmissible. He argued that Mr King adopted a zealous and partisan approach that was maintained at the time he composed his reports. While I accept Mr Davie's criticism of the document and agree with him that 'it is not anywhere approaching a rigorous document' I note that Mr Davie did not seek to challenge Mr King’s record of his observations at the various sites. I allowed the report into evidence however the weight to be given to the contents of that document remains to be determined.
26 Also included in Commissioner’s evidence are statements from owners of the properties referred to above. Those statements are generally consistent with the comments made by Mr Hanlon in his reasons for decision relating to the Notice to Show Cause. Of those individuals, Ms Meagan Cutcliffe, Ms Wilga Pruden, Ms Maureen Hyde and Mr Donald Taylor attended the hearing and adopted their statements as true and correct. They were not cross-examined.
Summary of evidence
27 It is convenient to discuss and make findings separately for the various matters alleged against the applicants. While the grounds on which the applicants were required to show cause are not clearly articulated, several items can be identified from Mr Hanlon’s reasons. I propose to deal with them under the following heads:
A. Issues relating to defective work and breach of statutory warranties at 12 Wellman Road, Forestville
B. Issues relating to defective work and breach of statutory warranties at 12 77 Ellery Parade, Seaforth
C. Issues relating to defective work and breach of statutory warranties at 12 53 Darley Street, Forestville
D. Issues relating to defective work and breach of statutory warranties at 12 21 Valley Road, Balgowlah Heights
E. Issues relating to defective work and breach of statutory warranties at 12 Unit 5, 1 Bond Street, Mosman
F. Issues relating to home warranty insurance
G. Issues relating to contracts and promotional advertising
H. Issues relating to improper conduct under the Act and the Company's method of doing business.
I. Issues relating to supervision
A.Issues relating to defective work and breach of statutory warranties at 12 Wellman Road, Forestville
The Commissioner’s case
28 Mr Douglas Weber and Mrs Nona Weber, the owners of 12 Wellman Road, Forestville, provided statements concerning their dealings with the Company and Mr Hutchings. Their evidence is essentially as set out in Mr Hanlon’s reasons.
29 The Commissioner alleges that the Company carried out installation work that does not comply with the Australian/New Zealand Wiring Rules (AS/NZS 3000:2000) contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998. He further asserts that a person who carries out work otherwise than in accordance with the Australian/New Zealand Wiring Rules (AS/NZS 3000:2000) is guilty of an offence.
30 The evidence is that Mr King carried out an inspection of the electrical work at 12 Wellman Road, Forestville on 25 July 2001. Mr King identified defects where installation work did not comply with AS/NZS 3000:2000, contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998. Mr King also explained the possible consequences of the defects. Mr King observed that:
(i) The disused conductors at the front of the hinged panel of the switchboard were not terminated, insulated, connected or removed. This is contrary to clause 1.7.7 of AS/NZS 3000:2000.
(ii) The lounge room light was not earthed. This is contrary to clause 5.4.1 of AS/NZS 3000:2000.
(iii) New earthing conductors were not threaded through the terminal cover of the light fitting. This is contrary to clause 1.7.3 of AS/NZS 3000:2000.
(iv) The lamp holder was left connected by three strands of the 24 strand conductor supplying the associated lamp holder. This is contrary to clause 1.10.1 of AS/NZS 3000:2000.
(v) The light in the upstairs study was left unsafe as the lamp holder was only supported by the connection at the terminals of the associated conductors. This is contrary to clause 1.10.1 of AS/NZS 3000:2000.
(vi) The equipotential bonding conductor installed on the metallic switchboard enclosure was not of an adequate cross-sectional area to protect the 16mm2 consumer mains. This is contrary to cause 5.83 of AS/NZS 3000:2000.
(vii) The 16mm2 equipotential bonding conductor of the metallic switchboard enclosure was not directly connected to the main neutral link and the enclosure. This is contrary to clause 5.7.3.4 of AS/NZS 3000:2000.
(viii) The PVC bushing was not fixed in place and glued as required. This is contrary to clause 3.10.3.5 of AS/NZS 3000:2000.
(ix) The disused conductors were not terminated, insulated, connected or removed. This is contrary to clause 1.10.1 of AS/NZS 3000:2000.
(x) A conductor of the new 16mm2 consumer's mains was not protected against mechanical damage. This is contrary to clause 3.9.4.1 of AS/NZS 3000:2000.
31 Mr John Mazey is an Installation Inspector with Energy Australia. He is a licensed electrical contractor with 39 years experience in the electrical industry. Mr Mazey’s evidence is that he carried out an inspection of the electrical work at 12 Wellman Road, Forestville on 22 October 2001. As a result a Defect Notice was issued to the Company. The notice identifies a number of defects, where installation work did not comply with AS/NZS 3000:2000. The defects identified in the notice include:
(i) The bonding conductor connected to the metallic switchboard enclosure was not of an adequate cross sectional area contrary to clause 5.8.3.2 of AS/NZS 3000:2000.
(ii) The holes through which the cables passed were not bushed contrary to clause 1.10.1 of AS/NZS 3000:2000.
(iii) The disused cables located behind the hinged panel were not terminated contrary to clause 3.9 of AS/NZS 3000:2000.
(iv) The neutral conductors associated with the residual current devices were identified contrary to clause 2.9.4.4 of AS/NZS 3000:2000.
(v) The numbering of the neutral conductors associated with the power circuits did not correspond with their numbered terminals at the protected neutral link. This is contrary to clause 2.9.4.4 of AS/NZS 3000:2000.
The Applicants’ case
32 Mr Hutchings provided a statement date 17 October 2001 in which he offered a response to Mr King's report. In the statement he addresses the allegations brought by the Commissioner. He states:
"55. In response to number (48). The invoice receipt issued by Stan Bryant does not indicate the replacement of an element of a Kitchen Aid dishwasher. It indicates the replacement of an element in a dryer and the checking of a dishwasher. If in fact there was a problem with the dishwasher causing the RCD to trip after we had rewired the circuit I am sure that Mr. Webber would have contacted Hutchings Electrical. To date we have not been advised of any problem with any appliance on the rewired circuit.
56. In response to number (48)(a,b,c &d).The connection of RCD's to circuits often highlights deficiencies with circuits and or appliances. Often there can be a combination of faults identified, some immediately and some once the circuit is reconnected. As appliances with heating elements ingress moisture from the air and or water contained in the appliance, their level of insulation resistance can periodically alter. What may test and work one day can cause a safety switch to trip another day. This does not indicate that there was any fault in the electrical appraisal of the need to rewire the circuit.
57. In the statement number (49) Mr. King states; "The disused conductors at the front of the hinged panel of the switchboard were not terminated insulated or connected. As required by AS/NZS 3000:2000 clause 1.7.7."
58. In response to number (49). This was a minor classification defect that was repaired by Hutchings Electrical as per defect notice annexed here to.
59. In the statement number (50) Mr. King states; "The insulation of the disused conductor was in a serviceable condition and would not warrant replacement solely on the condition of the insulation of this conductor."
60. In response to number (50). It would appear that Mr. King came to his conclusion that the old black rubber power circuit cable was adequate by only a visual inspection of cable in the meter box. If he had carried out the same Insulation Resistance testing that Hutchings Electrical did he to would have come to the conclusion that the circuit required rewiring.
61. In the statement number (52) Mr. King states; "In conjunction with the above document, I refer to the document of 15 January 2001 issued by Hutchings Electrical that states "Quotation" Quote No 3357 "Earth three fittings downstairs, oyster outside, lounge room light, outside light at front door".
(a) My inspection revealed that the lounge room light referred to in this quotation was not earthed after Hutchings Electrical had completed the installation work. This contravenes the requirements of AS/NZS clause 5.4.1.
(b) However, Mr. Webber was charged for this work.
(c) As a result persons were left exposed to inadvertent contact with bare live metal which could result in shocks or death."
62. In response to number (52). During the Administrative Decisions Tribunal hearing Mr. King indicated that he was unsure if there was another light fitting in the lounge room that could have been the one that was been earthed by Hutchings Electrical.
63. In the statement number (53) Mr. King states; "In "Quotation" Quote No 3357 there is reference to earthing of the outside light at the front door. I consider that this work was not necessary."
64. In response to number (53). Mr. Webber was advised of this oversight by the attending installation technician.
65. In the statement numbers (54-56) Mr. King makes a variety of assumptions. Unfortunately as the electrician is not contactable I can not advise if he worked on these fittings.
66. In the statement number (57) Mr. King states; "1 refer to the document of 15 January 2001 issued by Hutchings Electrical entitled, "10 Point Safety Check" item Number 5. Main earth and Water Pipe Bond (6mm). I am of the opinion that the statement in the comments section of this item is inaccurate in that the statement infers that the Australian Standard AS/NZS 3000:2000 requires the existing main earth conductor to be replaced with a 6mm main earthing conductor. Which is not the case. The size of the main earthing conductor required to protect the active of the consumer mains is determined from table 5.1 AS/NZS 3000:2000 in relation to the cross sectional area of the largest active conductor. In this case the 7/.036 main earth was in order in relation to the existing 7/.044 consumer mains. Only when the new 16mm consumer mains were installed was a larger earth wire required.
67. In response to number (57). The current regulation size main earth and water pipe bond on new installations and when installing a 16mm consumer main is 6mm, As advised Mr. Marsh was incorrect in assuming that this particular situation warranted the larger earth.
68. In the statement number (58) Mr. King states; "I refer to the document of 15 January 2001 issued by Hutchings Electrical entitled, "10 Point Safety Check" item No 6 Mains cable from point of attachment to metering position. I am of the opinion that the statement in the comments section of this item is inaccurate in that the statement infers that AS/NZS 3000:2000 requires that the existing consumers mains have to be replaced. The existing consumer mains were capable of carrying the existing maximum demand as determined in accordance with the Standard. As the installation had a gas water heater and stove and Mr. Webber did not indicate to Hutchings Electrical that he intended to install new electric appliances such as air conditioning in the near future. I am of the opinion that the existing consumer mains did not warrant replacement.
69. In response to number (58). As previously indicated Mr. Marsh made an error of judgment which he has been reprimanded for and the customer was offered a refund.
70. In the statement number (59) Mr. King states; "The 7/.036 equipotential bonding conductor installed on the metallic switchboard enclosure was not of adequate cross-sectional area to protect the 16mm consumer mains, as required by AS/NZS 3000:2000 clause 5.8.3."
71. In the statement number (60) Mr. King states; "The 16mm equipotential bonding conductor of the metallic switchboard enclosure was not directly connected to the main neutral link and the enclosure, as required by AS 3000:2000 clause 5.7.3.4"
72. In response to numbers (59 & 60). An authorized service provider connected the new 16mm consumer mains in the meter box. The undersized bond to the box is not Hutchings Electrical's responsibility.
73. In the statement number (61) Mr. King states; "The PVC bushing used to bush the aperture in the metallic surround of the switchboard where the new 16mm consumer mains pass through the metal surround of the switchboard enclosure was not fixed in place and glued as required by AS 3000:2000 clause 3.10.3.5."
74. In response to number (61). Once again the service provider was the last electrician to work in the meter box and the responsibility should have been his.
75. In the statement number (62) Mr. King states; "The disused conductors at rear of hinged panel, were not terminated, insulated, connected or removed as AS 3000:2000 clause 1.10.1."
76. In response to number (62). This defect is disputed and the regulation clause stated does not apply. However Hutchings Electrical has rectified the situation.
77. In the statement number (63) Mr. King states; "A conductor of the new 16mm consumer mains was not protected against mechanical damage at the rear of the hinged panel of the switchboard,
(a) The PVC insulation was damage where it came in contact with the fixing screws of the Supply Authority meter and did not comply with AS 3000:2000 clause 3.9.4.1."
78. In response to number (63). The new consumer mains were connected by an authorised service provider and are his responsibility.
79. In the statement number (64) Mr. King states; "The PVC sheathed conductor installed adjacent to the main switchboard in the garage was not protected against mechanical damage where "metallic chicken wire" was placed over the PVC sheathed conductor."
80. In response to number (64). Hutchings Electrical is not responsible for existing works and as such has not been defected for this situation. Energy Australia does have the power if a dangerous situation does exist that it may issue a defect to the customer. This has not been done and as such I conclude that the situation is in fact not of a dangerous nature.
81. In the statement number (65) Mr. King states; "I refer to the document left in the letterbox of Mr. Webber at 12 Wellman Road Forestville January 2001 on behalf of Hutchings Electrical. The pamphlet indicates full compliance with the Standards Association of Australian Wiring Rules and Regulations.
(a) This statement is misleading, as the Standards Association of Australia has not existed for a number of years.
(b) However as indicated previously there is a publication known as Australian/New Zealand wiring rules and as indicated Hutchings Electrical has made a number of departures from this Standard.
82. In response to number (65). Hutchings electrical to the best of its ability complies with all relevant rules and regulations. Any errors are addressed and rectified. The electricians have been given further training in testing and safety issues to refresh and improve their understanding of all of the regulations. Hutchings Electrical is committed in it decision to provide future training in these areas."
33 Mr Hutchings provided further statements dated 23 February 2003, in which he offered these following additional comments in relation to the Commissioner’s allegations:
"25. In response to paragraph 5, which states; "On 25 July 2001 a departmental inspector carried out an assessment of the site. He observed ten instances where electrical work had been carried out contrary to AS/NZS 3000:2000 (Clauses 1.7,3, 1.7.7, 1.10.1, 3.9.4.1, 3.10.3.5, 5.4.1, 5.7.3.4 and 5.8.3.).
I will list the ten individual instances so I may respond to them individually. This is as per the Investigation report dated 5 September 2002 a copy is annexed here to.
i) The disused conductors at the front of the hinged panel of the switchboard were not terminated, insulated, connected or removed. This is contrary to clause 1.7.7.
In response, the licensed service provider Andrew Sutton Electrical Pty Ltd was contracted to carry out the mains and metering work at the switchboard. An additional license is required to do this work, which is why we use authorized sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
ii)The lounge room light was not earthed; this is contrary to clause 5.4.1.
In response, all the light fittings in the house were existing and as such are required to comply with the regulations from when they were installed, not the current regulation. Irrespective of this Hutchings Electrical has earthed the light fitting. These light fittings had been in place approximately 40 years; as I would estimate the house build date to be in the 1960's. The occupants of the home have had no issues with these fittings during this time.
iii) New earthing conductors were not threaded through the terminal cover of the light fitting. This is contrary to clause 1.7.3.
This instance would be classified by Energy Australia as "minor" because it is a departure from the wiring rules, which is not immediately dangerous to life health or property. Hutchings Electrical has made the appropriate repairs.
iv) The Lamp holder was left connected by three strands of the 24 strand conductor supplying the associated lamp holder.
In response, Hutchings Electrical did not install or work on this lamp holder it was an existing poor connection, and we were therefore not responsible for this. If Hutchings Electrical had been aware of the connection's failure to meet regulation as per our policy we would have notified the customer and provided a quotation to rectify the situation.
v) The light in the upstairs study was left unsafe as the lamp holder was only supported by the connection at the terminals of the associated conductors. This is contrary to clause 1.10.1.
In response, this would be classified by Energy Australia as a "minor" defect as it was not immediately dangerous to life health or property. It was a lamp holder that had come loose from its bracket at some point prior to the inspection by the Department. Hutchings Electrical repaired it once we were advised.
vi) The equi-potential bonding conductor installed on the metallic switchboard enclosure was not of an adequate cross sectional area to protect the 16mm consumer mains. This is contrary to clause 5.8.3.
In response, a licensed service provider Andrew Sutton Electrical who was contracted to carry out the metering and mains work created this defect. An additional license is required to do mains and metering work, which is why we use authorized sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
vii) The 16mm equi-potential bonding conductor of the metallic switchboard enclosure was not directly connected to the main neutral link and the enclosure. This is contrary to clause 5.7.3.4.
In response, a licensed service provider Andrew Sutton Electrical who was contracted to carry out the metering and mains work created this defect. An additional license is required to do mains and metering work, which is why we use authorized sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
viii) The PVC bushing was not fixed in place and glued as required. This is contrary to clause 3.10.3.5.
In response, a licensed service provider Andrew Sutton Electrical who was contracted to carry out the metering and mains work created this defect. An additional license is required to do mains and metering work, which is why we use authorized sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
ix) The disused conductors were not terminated, insulated, connected or removed. This is contrary to clause 1.10.1.
The clause stated is incorrect; the correct clause would be 1.7.7. In response, a licensed service provider Andrew Sutton Electrical who was contracted to carry out the metering and mains work created this defect. An additional license is required to do mains and metering work, which is why we use authorized sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
x) A conductor of the new 16mm consumer mains was not protected against mechanical damage. This is contrary to clause 3.9.4.1.
In response, a licensed service provider Andrew Sutton Electrical who was contracted to carry out the metering and mains work created this defect. An additional license is required to do mains and metering work, which is why we use authorized sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
26. In response to paragraph 6, which states; "In the inspector's view the Company's failure to comply with AS/NZS 3000:2000 significantly increased the exposure of the house's occupants to suffer injury from electrical shock and damage to the house through fire"
All of the defects were classified as minor by Energy Australia as they are not immediately dangerous to life health and property.
To say that there is a "significant increase in risk" is contradictory to the electrical inspector's report, which classifies all of the defects as "minor". Of these ten instances noted I find six to be due to work undertaken by the authorized service provider Andrew Sutton Electrical, all of which are classified as "minor" by Energy Australia. Two were issues with existing work and bound by regulations current at the time of installation, they were not defects. Hutchings Electrical would be accused of over servicing if we attempted to change every installation that did not meet current regulations. The remaining two were resolved by Hutchings Electrical and once again were classified "minor" by Energy Australia. I therefore believe the view of the department inspector to be totally unsubstantiated, and inaccurate. I feel that the report annexed here to from the ADT supports my view.
27. In response to paragraph 7, which states, "On 22 October 2001 an Energy Australia installation inspector carried out an inspection. Five instances were observed where the work failed to comply with AS/NZS 3000:2000 (Clauses 1.10.1, 2.9.4.4 and 3.9). The inspector issued a defect notice to the Company, which required it to rectify the stated defects within a 21 day period."
As I have detailed above I find three of these five defects to be the result of work carried out by the authorized service provider Andrew Sutton, those being 16(vi) 16(viii) and 16(ix). Hutchings Electrical has altered our policy so that checks are made on any work contracted out. The two remaining defects were classified "minor" by Energy Australia; Hutchings Electrical rectified all of the defects."
34 In a statement date 17 October 2001 Mr Hutchings offered further opinion with respect to the events surrounding the carrying out of the work that is the subject of this allegation and asserted that this incident would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property. Mr Davie submitted that while Mr King identified ten defects after his investigation, his evidence is uncorroborated and should be treated with caution. The Energy Australia Inspector only picked up five of those defects.
35 Mr Davie further submitted that all of the Energy Australia defects have been rectified. Of those, the evidence is that none required rectification by the inspector, all were minor and two were existing. Six of the defects were attributable to Andrew Sutton’s work. Mr King's evidence was that the defects referable to the work of Andrew Sutton at this site were not considered of sufficient significance to warrant an investigation into the activities of Andrew Sutton.
Findings in relation to this allegation
36 I note the general submission that Mr Davie has made in relation the weight to be given to the opinions offered by Mr King. Mr Davie has asserted that Mr King has been shown to be zealous and partisan. He said that therefore Mr King's report is to be treated with caution. I agree with this submission.
37 Nevertheless, Mr King's role in the investigative process is as an employee of the Commissioner. The Commissioner has a statutory obligation in relation to the supervision of residential building work in this State and in performing that obligation is authorised to employ staff with appropriate qualifications. This will inevitably result in a degree of difficulty in following through the Commissioner's role in legal proceedings. It would be impracticable for the Commissioner to employee independent experts in every matter where he is required to take disciplinary action.
38 It is unfortunate that in these particular proceedings Mr King has ventured beyond the role of an expert witness. An expert witness should provide independent assistance to the Tribunal by way of objective unbiased opinion in relation to matters within his expertise. An expert should never assume the role of advocate. Mr King conceded as much. In my opinion at least some of Mr Kings comments must be seen as advocacy. Consequently much of the material contained in his reports can be given very little weight.
39 It remains to be determined whether any weight can be given to the remainder of Mr King’s evidence. In the NSW Court of Appeal decision in R v. P [2001] NSWCA 473 it is stated at paragraph 55:
"55 Where what one is dealing with is the opinion of a medical expert, derived in part from confidential communications to the expert from the client, one runs into the difficulty that, as a general rule, the opinion of an expert can be given in evidence only if the assumed facts on the basis of which the opinion is given are also given in evidence: see Ramsay, Paric and Makita. Certainly, where the relevant facts are assumed facts, not dependent upon the expert's own observation, the stating of such facts is necessary in order that the opinion be admissible: otherwise, the opinion would simply be irrelevant."
40 I also note the view expressed by the Appeal Panel in Taylor -v- Director General, Department of Transport (GD) [2001] NSWADTAP 29 where it is stated at paragraph 85:
"In informing itself on any matter in such manner as it thinks appropriate, the Tribunal endeavours to be fair to the parties. It endeavours not to put the parties to unnecessary expense and may admit into evidence evidentiary material of a logically probative nature notwithstanding that that material is not the best evidence of the matter which it tends to prove. But the Tribunal does not lightly receive into evidence challenged evidentiary material concerning a matter of importance of which there is or should be better evidence. And the requirement of a hearing and the provision of a right to appear and be represented carries with it an implication that, so far as is possible and consistent with the function of the Tribunal, a party should be given the opportunity of testing prejudicial evidentiary material tendered against him. It is generally appropriate that a party should have an opportunity to do more than give evidence to the contrary of the evidence adduced on behalf of the other party. He should be given an opportunity to test the evidence tendered against him provided that the testing of the evidence seems appropriate in the circumstances and does not conflict with the obligation laid upon the Tribunal to proceed with as little formality and technicality and with as much expedition as the matter before the Tribunal permits."
41 In the circumstances, and notwithstanding my view that in these proceedings Mr King has ventured beyond the role of an expert witness, Mr King's evidence as to his observations at each of the sites where he carried out inspections is accepted. In most instances Mr Mazey had also undertaken an inspection of the site and provider reported of his observations.
42 Mr Mazey’s evidence is accepted. He is an employee of energy Australia and has nothing at all to gain from these proceedings. In contrast, Mr Hutchings stands to lose a great deal. In any event, the applicants have presented no evidence to suggest that the observations by either Mr King on Mr Mazey were incorrect. In the circumstances I prefer the evidence offered on behalf of the Commissioner to that given by Mr Hutchings.
43 I find as the fact that the defects identified by the Commissioner are proven. I am satisfied that these defects constitute improper conduct for the purposes of section 51 of the Act. I note the evidence of the rectification work undertaken by the Company and I agree that these defects were minor.
B. Issues relating to defective work and breach of statutory warranties at 77 Ellery Parade, Seaforth
The Commissioner’s case
44 Mr Donald Taylor and Ms Glynis Matthews, the owners, provided statements dated 15 January 2002 concerning their dealings with the Company and Mr Hutchings.
45 The Commissioner alleges that the Company carried out installation work that does not comply with AS/NZS 3000:2000 contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998. As the defects were not rectified within the timeframe specified on the notice, a notice to disconnect supply was sent to the home owners. He further asserts that the Company is in breach of section 18B(c) of the Act as it carried out electrical installation work contrary to clause 16 of the Electricity Supply (Safety Plans) Regulation 1997 as the work did not comply with the NSW Service and Installation Rules.
46 On 7 August 2000 an Energy Australia Installation Inspector carried out an inspection of the electrical work and a Defect Notice was issued to the Company. The notice identified defects, where installation work did not comply with AS/NZS 3000:2000, contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998. The defects identified in the notice include:
(i) The lighting circuits were not protected by a residual current protective device. This is contrary to clause 2.5.3.1 of AS/NZS 3000:2000.
(ii) The cables in the roof were not protected where they crossed over the top of the timber joists. This is contrary to clause 3.9.4.3 of AS/NZS 3000:2000.
47 The Commissioner asserts that it is implied that the holder of a licence, will do work in accordance with the Act and any other law. If the holder of a licence fails to comply, it is a breach of section 18B(c) of the Act. The defect notice issued by Energy Australia identified where work did not comply with the NSW Service and Installation Rules (Service Rules) and include:
(i) The entrance door of the flat was not labeled. This is contrary to Service Rule 1.9.8.
(ii) The main switches could not be sealed in the off position. This is contrary to Service Rule 4.13.
(iii) The line taps used to connect to the consumers mains were not of an approved type. This is contrary to Customer Installations Advice No. 1098.
48 On 3 October 2001 Mr King carried out an inspection of the electrical work at 77 Ellery Parade, Seaforth. In addition to the defects listed in the defect notice issued by Energy Australia, Mr King identified other defects where installation work did not comply with AS/NZS 3000:2000 and explained the possible consequences in his statement. These include:
(i) The bathroom light was not earthed. (p.18) This is contrary to clause 5.4.1 of AS/NZS 3000:2000.
(ii) The switchboard was not marked or arranged to identify the corresponding active and neutral connections for each circuit. (p.21) This is contrary to clause 2.9.4.4 of AS/NZS 3000:2000.
(iii) The 16mm2 building wire connected to flat number one main switch was not retained in position by all strands at the bottom terminal of the switch. (p.22) This is contrary to clause 1.10.1(e) and 3.7.2.4 of AS/NZS 3000:2000.
(iv) The earthing conductor installed as an equipotential bonding conductor for the metallic switchboard enclosure was not of an adequate cross-sectional area. (p.23) This is contrary to clause 5.7.3.4 of AS/NZS 3000:2000.
(v) The aperture in the metallic switchboard enclosure where conductors entered the switchboard was not bushed or shaped to prevent damage to the insulation of the conductors. (p.24) This is contrary to clause 3.10.3.5 of AS/NZS 3000:2000.
(vi) The socket outlet in the cellar was not adequately fixed to the wall exposing their live terminals to inadvertent contact. (p.25 This is contrary to clause 2.9.6 of AS/NZS 3000:2000.
(vii) The terminal cover of the light fitting in the lounge room was not in position. As a result the connections to the light were not made in a suitable enclosure. (p.26) This is contrary to clause 3.9.40.1 of AS NZ 3000:2000.
(viii) The disused sheathed conductors installed in the garage were not terminated, insulated or connected. (p.27) This is contrary to clause 1.7.7 of AS/NZS 3000:2000.
(ix) The existing wall oven and hot plate conductors installed within 50mm of the ceiling rafters in the garage were not protected against mechanical damage. (p.28) This is contrary to clause 3.9.4.3 of AS/NZS 3000:2000.
The Applicants’ case
49 As with the Commissioner’s other allegations Mr Hutchings provided statements addressing each of the issues raised. In his statement dated 17 October 2002 he stated:
"28. In the statement number (30) Mr. King states; " I am in the view that it was not necessary to carry out any of the work as listed in the document of 27 March 2000 issued by Hutchings Electrical Quotation No 2290, in order to rectify the electrical problems experienced by Ms. Mathews and Mr. Taylor at the time."
29. In response to number (30). The majority of the work carried out as per the quotation was upgrading and adding equipment. Both parties agreed upon this work and it was separate to the issues that Ms. Mathews was having.
30. In the statement number (31) Mr. King states; " A fundamental aspect of any safety check of this installation should recommend that an additional power point be installed in the bathroom to supply the washing machine. This would negate the use of an extension lead over a wet tiled floor to supply this appliance. Particularly, since the light and power final sub circuits were rewired and additional power points were installed and small children use the bathroom in the house."
31. In response to number (31). The location of the outlets in every room of the house was discussed with the customer. The final number of outlets and position within the guidelines is the customer's choice. Hutchings Electrical can only offer suggestions and meet regulations.
32. In the statement number (32) refers to the interview with myself and states; "Mr. Hutching indicated in line 376 that he does not check the work of the six electricians working for him but monitors the defects against the tradesmen.
(a) Advice from Energy Australia indicates that Hutchings Electrical between 1 January 2001 and 21 March 2002 submitted 790 NOEW. Energy Australia inspected 87 of these sites and issued 28 defect notices. That is 32% of Hutchings Electrical jobs inspected were defected.
(b) Supply Authorities test currently only 10% of Notifications of Electrical Work (NOEW). Electrical Contractor failing to lodge NOEW's on work that does not involve Supply Authority further reduces this figure.
(c) In lines 802 to 807 Mr. Hutchings indicated that his staff use a kombi tester to conduct a safety check as opposed to an Installation Tester (Megger)."
33. In response to number (32), 1 said that I monitor the defects of the Electricians; I did not say or mean to imply that I do not check their work.
34. In response to number (32)(a). Of the 28 defect notices all repairs were carried out. No thorough checking of Energy Australia inspection notices was performed, we have since found this to be crucial, as we have received many defect notices that are incorrect or for work that we are not responsible for.
35. In response to number (32)(c). Hutchings Electrical staff uses a variety of testing equipment. They include both Kombi testers and Installation Testers (Megger)."
50 In his statement dated 23 February 2003 Mr Hutchings stated:
"32. In response to paragraph 6, which states; "On 7 August 2000 Mr Taylor lodged a complaint against the Company to the Department. On the same date, an Energy Australia installation inspector carried out an inspection on the site. He observed 2 instances where the work failed to comply with AS/NZS 3000:2000 (Cause 2.5.3.1 and 3.9.4.3) and two instances where the work failed to comply with the NSW Service and Installation Rules (Rule 1.9.8 and 4.13) The inspector issued a defect notice to the Company, which required it to rectify the stated defects within a 21 day period." Firstly I would like to note that no complaint was made to Hutchings Electrical between the work commencing 27 March 2000 and the date of Energy Australia's inspection on 7 August 2000. It was only after his meeting with Energy Australia that Mr Taylor decided to go to Department of Fair Trading. We have had feedback from several customers that Energy Australia inspectors have upset them by unfairly criticising Hutchings Electrical. The following defects were listed on this notice;
a. The lighting circuits were not protected by a residual current protection device. Rule reference; AS/NZS 3000:2000 2.5.3.1.
b. The entrance door of the flat was not labeled. NSW service rules.
c. Cables in the roof were not protected where they crossed over the timber joists. Rule reference; AS/NZS 3000:2000 3.9.4.3.
d. The main switches were not able to be sealed in the off position. Rule reference; NSW service rules.
e. The line taps used to connect the consumer mains were not of an approved type. Rule reference; NSW service rules.
33. In response to defect (a), we should not have been issued with a defect on this as the relevant ruling only became effective on July l 2000, which is after the work was completed and Notification of Electrical Installation was forwarded to Energy Australia and customer.
34. In response to defects (b &c) these were oversights that have been addressed with staff, and a training course was organised to prevent future reoccurrences.
35 In response to defect (e), the mains and metering work that this defect relates to was done by licensed service provider Andrew Sutton Electrical. An additional license is required to do mains and metering work, which is why we use authorised sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance was classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
36. All defects as listed above (a-e) were rectified; A Notification of Electrical Installation is annexed here to.
37. In response to paragraph 7, which states;" The defected work was not rectified within the stipulated period causing Energy Australia to issue a disconnection notice to house's occupants on 17 October 2000."
Hutchings Electrical did not receive a defect notice from Energy Australia and only became aware when notified in October 2000 by Mr Taylor that any issues existed. As is clarified above the defects noted were classified minor by Energy Australia, as they were not immediately dangerous. As soon as we became aware of the situation the issues were resolved and a notification NOEW, which is annexed here to was sent to Energy Australia to confirm this.
38. In response to paragraph 8, which states; "On 3 October 2001 a departmental inspector carried out an assessment of the site. He observed 9 instances where electrical work had been carried out contrary to AS/NZS 3000:2000 (Clauses 1.7.7, 2.9.4.4, 2.9.6, 3.7.2.4, 3.9.40.1, 3.9.4.3, 3.10.3.5, 5.4.1 and 5.7.3.4."
(a) "I refer to the document of a Notification of Electrical Work dated 5 April 2000 issued by Hutchings Electrical Pty Ltd. which describes rewiring all lights throughout the house. My inspection revealed that the bathroom light was not earthed. This contravened the requirements of AS/NZS 3000:2000 clause 5.4.1. As a result, under fault conditions the metallic base of the light fitting could become live and cause shocks or death to any person who comes in contact with the metallic base, particularly as the light fitting was installed in a damp environment such as a bathroom."
In response the customers were advised that various light fittings required replacing, as they were unable to comply with regulations due to design and general condition. The bathroom fitting mentioned was one of those that we advised the customer to replace. Also note the light fitting had been in this general condition for approximately 30 years.
(b) "The switchboard was not marked or arranged to identify the corresponding active and neutral connections for each circuit. This is contrary to clause 2.9.4.4." This defect was classified "minor" by Energy Australia, as it is not immediately dangerous to life health and property. The labelling in question was at the rear of the switchboard and is for the benefit of electricians. It had no impact on the customer. Hutchings Electrical has rectified the issue.
(c) "The 16mm building wire connected to the flat number one main switch was not retained in position by all strands at the bottom terminal of the switch. On finding this connection I connected it in accordance with the requirements of the clause 1.10.1(e) and 3.7.2.4 of AS 3000:2000 for safety. A defect of this nature could result in a fire at the switchboard and or loss of supply to the installation." In response; the licensed service provider Andrew Sutton Electrical Pty Ltd was contracted to carry out this work. An additional license is required to do mains and metering work, which is why we use authorised sub-contractors. However, Hutchings Electrical was able to resolve the issue. We have now altered our policy so that checks are made on any work contracted out. This instance would be classified as a minor defect by Energy Australia as it is not immediately dangerous to life health and property.
(d) "The disused sheath conductors installed in the garage were not terminated, insulated or connected. This contravened the requirements of AS/NZS 3000:2000 clause 1.7,7. As a result persons were exposed to inadvertent contact with bare live metal which could result in shocks or death." I would dispute the inspector's interpretation of the regulation. The regulation refers to cables that are bunched together, being either terminated or removed. The cables in question were not bunched they were running independently. I would reason that this is why there was no defect issued by the Energy Australia inspector. The potential defect referred to would be classified as minor by Energy Australia as it is not immediately dangerous to life health and property
39. In response to paragraph 9, which states; "According to Mr Taylor, the problem with tripping of the safety switch was corrected following the replacement of an iron" It is the policy of Hutchings Electrical to explain to all customers with safety switches tripping how to do a simple test to ascertain if the cause of the tripping is an appliance or the result of a more complex problem. We suggest the customer go through the house and disconnect all appliances. Then by reconnecting them one at a time they can ascertain if one of them is faulty. Because irons can ingress moisture they are quite common offenders and are explained as such. This procedure was discussed with Mr Taylor. Please see annexed complimentary guide for customers on the use of safety switches.
51 Mr Davie submitted that Mr King’s evidence that he had identified eight defects is uncorroborated and should be treated with caution. He asked the Tribunal to note that of these alleged defects an inspector rectified only one. He referred to Mr Hutchings’ uncontroverted evidence in his statement dated 17 October 2002, which is as follows:
"18. In the statement number (25) Mr. King states; " The socket outlet installed in the cellar was not adequately fixed to the wall thus exposing bare live terminals to inadvertent contact. This contravened the requirements of AS/NZS 3000:2000 clause 2.9.6. As a result persons were exposed to inadvertent contact with bare live metal, which could result in shocks or death. Temporarily refixed in position by an Officer of the Department customer advised of danger."
19. In response to number (25). It appears from looking at the photograph that there are anchoring plugs attached to the socket outlet and holes in the wall that would be correct for its mounting. I would conclude that the socket outlet has been removed from the wall with force. If advised of this situation by the customer Hutchings Electrical would have rectified it as our work is covered by a warranty."
52 Mr Davie further submitted that of the remaining alleged defects, none were thought worthy of rectification or warning by the inspector, all were minor, three were existing, one was disputed, three were carried out by Andrew Sutton and the remainder were rectified. He urged the tribunal to note that Andrew Sutton’s work did not appear to merit any investigation by the Department.
Findings in relation to this allegation
53 I find as the fact that the defects identified by the Commissioner are proven. I am satisfied that these defects constitute improper conduct for the purposes of section 51 of the Act. I note the evidence of the rectification work undertaken by the Company and with the exception of the single defect that was rectified by the inspector, I agree that these defects were minor.
C. Issues relating to defective work and breach of statutory warranties at 53 Darley Street, Forestville
The Commissioner’s case
54 Mr James Hyde and Hyde, the owners of 53 Darley Street, Forestville, provided statements concerning their dealings with the Company and Mr Hutchings.
55 The Commissioner alleges that the Company carried out installation work that does not comply with AS/NZS 3000:2000, contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998.
56 On 3 October 2001, Mr King carried out an electrical inspection of the premises at 53 Darley Street, Forestville. Mr King provided a statement that identified defects where installation work did not comply with AS/NZS 3000:2000, contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulations 1998. Mr King also explained the possible consequences of these defects. The defects include:
(i) The main earth connection to the earth electrode installed below the main switchboard was not adequately protected against mechanical damage. (p.105) This is contrary to clause 5.5.4.2 of AS/NZS 3000:2000.
(ii) The equipotential bonding conductor installed on the metallic switchboard enclosure was not of an adequate cross-sectional area to protect the 16mm2 consumers mains. (p. 106) This is contrary to clause 5.8.3.1 of AS/NZS 3000:2000.
(iii) The earthing link installed at the rear of the hinged panel of the metallic switchboard enclosure was not provided with a cover to prevent contact with single insulated conductors installed on the rear of the hinged panel (p.107) this is contrary to clause 5.5.4.2 of AS/NZS 3000:2000.
(iv) Circuit breakers protecting the lighting final subcircuits were incorrectly labelled on the main switchboard as not being protected by the RCD (p.108). This is contrary to clause 2.9.4.2 of AS/NZS 3000:2000.
(v) There was an intermixture of supply between the power circuit in the garage and the lights in the filing room at the rear of the garage and laundry. (p.109) This is contrary to clause 2.9.4.2 of AS/NZS 3000:2000.
57 Mr Mazey’s evidence is that on about 20 September 2001 he undertook an inspection of the electrical work at 53 Darley Street, Forestville. Following the inspection he produced a report which detailed breaches of the AS/NZS 3000:2000 and he subsequently issued a Defect Notice to the Company on 22 October 2001. The notice identified a number of defects, where installation work did not comply with AS/NZS 3000:2000, contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998. The defects identified in the notice include:
(i) The circuit breaker associated with the hot water service was not marked "main switch". This is contrary to clause 2.8.3.3.3 of AS/NZS 3000:2000.
(ii) The "main switch" was not marked to indicate the associated circuits. This is contrary to clause 2.8.3.3.3 of AS/NZS 3000:2000.
(iii) The neutral conductor associated with the hot water service was not identified. This is contrary to clause 2.9.4.4 of AS/NZS 3000:2000.
(iv) The conduit and main earthing conductor were not protected against mechanical damage between the wall and the electrode. This is contrary to clause 5.5.4.2 of AS/NZS 3000:2000.
(v) The new wiring was not fixed to the rear of the hinged panel. This is contrary to clause 2.9.5 of AS/NZS 3000:2000.
(vi) The earth link was not fitted with an insulated cover. This is contrary to clause 2.9.4.2 of AS/NZS 3000:2000.
(vii) The circuits associated with the residual current device were not all identified. This is contrary to clause 2.9.4.2 of AS/NZS 3000:2000.
The Applicants’ case
58 Mr Hutchings provided statements addressing each of the issues raised. In his statement dated 17 October 2002 he stated:
"85. In the statement number (96) Mr. King states; "I refer to the undated document issued by Hutchings Electrical, that states "Quotation" Quote number 2834, that was provided by Mr. J Hyde.
(a) I refer to the column labelled "Description of additional work required" and the statement "rewire four power circuits throughout the house all have a high resistance, causing the safety switch to trip".
(b) This statement is inaccurate, as a high resistance would not cause a safety switch to trip, rather the opposite would be the case."
86. In the statement number (97) Mr. Kings states; "A safety switch or by its correct title Residual Current Device (RCD) operates when the insulation resistance is "low" not "high"."
87. In the statement number (99) Mr. King states; "The term "high resistance" in an electrical application normally relates to connections or joints in cables at accessories. For example. A power circuit had a high resistance joint at the active terminal of the socket outlet in the laundry."
88. In response to numbers (96-99) inclusive. Firstly the quotation provided was dated, the date being 1 December 2000. Pleases see copy annexed here to. The fact that the word high was substituted for the word low was a simple oversight and nothing more. It is obvious that it was a low resistance as the Residual Current Device was continually tripping. The fact that the word high was mistakenly used in place of low does not make the description of work that was required incorrect or unwarranted. The testing was carried out correctly and the work quoted was the correct way to resolve the problems that Mr. Hyde was experiencing.
89. In the statement number (100) Mr. King states; "Mrs. Hyde advised me that Steve from Hutchings Electrical did not unplug the electrical appliances in the house prior to testing the circuits."
90. In response to number (100). I did in fact disconnect the appliances in the home and perform some basic tests to isolate the fault. This resulted in the safety switch still tripping. As I did not have time for a more thorough insulation resistance test, I arranged for this to be carried out later in the day by Mr. Marsh a licensed electrician working for Hutchings Electrical.
91. In the statement number (101) Mr. King states; "I do not consider the work described in Quotation No 2834 to be necessary, as the evidence suggests that an intermittent fault with the refrigerator caused the safety switch to trip and loose supply to the other three circuits. Not a high resistance on each of the four power circuits simultaneously."
92. In the statement number (102) Mr. King states; "I refer to the document of 3 March 2001 issued by Harvey Norman Balgowlah, Invoice No 4249057 for the cost of a new refrigerator.
(a) The evidence suggests that the original refrigerator had a low insulation resistance (leakage to earth)."
93. In response to numbers (101) and (102). There was no apparent fault with the refrigerator at the time of our visit. The fact that a refrigerator was replaced three months after our initial visit does not indicate that this was the problem. Also there was low resistance on all of the four power circuits. The refrigerator is only connected to one of the circuits.
94. In the statement number (103) Mr. King states; "Hutchings Electrical failed to test the above circuit and contrary to the requirements of AS/NZS 3000:2000 clauses 1.11. 1, 1.11.2.4 and 1.11.2.5."
95. In response to number (103). It is Hutchings Electrical's policy to test all of its work prior to connection. This statement has no merit.
96. In the statement number (105) Mr. King states; "The main earth connection to the earth electrode installed below the main switchboard was not adequately protected against mechanical damage as required by AS/NZS 3000:2000 clause 5.5.4.2.
(a) Under the MEN system of earthing if the main earth is broken the smaller earth bond to the water pipe becomes the main earth increasing the risk of shocks to the occupants of the installation."
97. In response to number (105). The minor defect was rectified once advised by Energy Australia. This type of defect is dependant on the opinion of the particular inspector at the time of inspection and does vary dependant on their interpretation of the situation.
98. In response to number (105)(a). This statement is incorrect as the bond to the waterpipe is the same size (cross sectional area) as the main earth and would continue to operate.
99. In the statement number (106) Mr. King states; "The 7/.036 equipotential bonding conductor installed on the metallic switchboard enclosure was not of adequate cross-sectional area to protect the 16mm consumer mains, as required by AS/NZS 3000:2000 clause 5.8.3.1."
100.In response to number (106). This statement is incorrect. The 16mm consumer mains and the bond to the box were existing and as such fully comply with their relevant regulation.
101. In the statement number (107) Mr. King states; "The earthing link installed at the rear of the hinged panel of the metallic switchboard enclosure was not provided with a cover to prevent contact with single insulation conductors installed on the rear of the hinged panel as required by AS/NZS 3000:2000 clause 5.5.4.2."
102. In response to the number (107). The earth link was existing and as such complies with the regulation by which it is covered.
103. In the statement number (108) Mr. Kings states; "The circuit breakers protecting the lighting final sub-circuits were incorrectly labelled on the main switchboard as not being protected by the RCD contrary to the requirements of AS/NZS 3000:2000 clause 2.9.4.2."
104. In response to number (108). It would appear that at some stage the labelling has been altered or the light circuits added to the RCD. This was existing work at the time of our rewiring the faulty power circuits.
105. In the statement number (109) Mr. King states; "There was an intermixture of supply between the power circuit in the garage and the lights in the filing room at the rear of the garage and laundry which was contrary to the requirements of AS/NZS 3000:2000 clause 2.9.4.2."
106. In response to number (109). I disagree that this was a wiring issue but merely a labeling issue. (i.e. A light can be on a power outlet circuit so long as the wiring is the correct size and the circuit breaker is labeled to identify the intermixture).
107. In the statement number (111) which refers to the interview with Mr. Stephen Marsh. Mr. King states; "Mr. Marsh in reference to testing, to establish the reason for the safety switch tripping referred to a high insulation resistance demonstrated in lines 2124 to line 2146 that he does not have an understanding of both the terminology and the acceptable testing procedures referred to in the Standards."
108. In response to number (111). Mr. Marsh is a competent tradesman and has worked with Hutchings Electrical in the residential market for the last three and a half years. The fact that Mr. Marsh did not deal well with a confrontational experience should not reflect on his level of knowledge and workmanship. It is not uncommon for people to balk in exam like conditions.
109. In the statement number (112) which refers to the interview with Mr. Marsh. Mr. King states; "Four circuits all having a low insulation resistance at once in a modern home is unusual."
110. In response to number (112). I do not agree that it is uncommon for a multiple number of circuits in a home to have a similar reading. In fact it makes more sense that as they were all installed at the same time (In this case I would estimate the home to be between 30 and 40 years of age) that the reading would in fact be similar.
111. In the statement number (113) which refers to the interview with myself. Mr. King states; "In lines 3737 to 3739 Mr. Hutchings indicated that he unplugged the appliances.
(a) The customer indicated in her statement that Hutchings Electrical did not unplug the appliances.
(b) In lines 3751 to 3755 Mr. Hutchings indicated that he did not see any unusual devices in the house when he unplugged the appliances.
(c) The owner of the house is visually impaired and as a result requires a special device consisting of a magnifying glass and a light to assist him to read documents. The device remains plugged in at all times.
112. In response to number (113). When doing a fault find it is not usual to ascertain the nature of all of the appliances that you unplug. The initial procedure is to unplug all appliances and then reset the RCD. If the RCD resets then plug the appliances back in one at a time to indicate the faulty appliance. The fact that I did not pay close attention to what the power outlets were supplying does not indicate that I did not carry out the procedure. As the RCD would not reset with the appliances unplugged Mr. Marsh performed further insulation resistance tests. This included splitting the relevant circuits at different points in the house to attempt to track the fault down to a specific area. This resulted in a low reading throughout all of the four circuits in the house, thus leading to the recommendation that the house be rewired.
113. In the statement number (116) which refers to the interview with myself. Mr. King states; "In lines 4219 to 4224 Mr. Hutchings indicated that his company had received a couple of defects, another inspector's gone back to check the defects off and he's found a couple more defects. So the first inspector missed things that the second inspector found. So we are only human.
(a) I cannot agree with this comment. A NOEW has to be lodged by the electrical contractor to cover the rectification of the original defects and inspectors inspect the installation as per the second NOEW
(b) If the electrical contractor has created additional defects in rectifying the original defects a second defect sheet is issued."
114. In response to number (116). Many of the regulations are open to interpretation and are dependant upon the opinion of the authorised inspector. We have experienced numerous occasions over the years were one inspector will attend an inspection and provide a different result to a previous inspection. We have found that the accuracy of the inspectors' interpretation of the regulations has diminished. See letter from Hutchings Electrical to Energy Australia, which is annexed here to.
115. In the statement number (118) which refers to the interview with myself. Mr. King states; "Mr. Hutchings in lines 4515 to 4536 indicated that he had difficulty in employing local tradesman so he employed overseas electricians who were not licensed and put them through the system.
(a) This has further exacerbated the situation.
116. In response to number (118). In the period around the 2000 Olympics there was a shortage of tradesman in Sydney, due to the large amount of construction work taking place. After numerous advertisements in `The Manly Daily' our local paper the only qualified electricians with suitable experience that responded were from the UK. We went on to sponsor both of these tradesmen as they worked well in our team of six. Both of the tradesmen gained the NSW electrical licensing qualification so they could work on their own. One of these men is still employed by Hutchings Electrical, while the other has since left our employ."
59 In his statement dated 23 February 2003 Mr Hutchings stated:
"46. In response to paragraph 7, which states; "On 3 October 2001 a departmental inspector carried out an assessment of the site, He observed 5 instances where electrical work had been performed contrary to AS/NZS 3000:2000 (Clauses 2.9.4.2, 5.5.4.2 and 5.8.3.1)
47. The report regarding clause 2.9.4.2 states;" The circuit breakers protecting the lighting final sub-circuits were incorrectly labelled on the main switchboard as not being protected by the RCD contrary to the requirements of AS/NZS 3000:2000 clause 2.9.4.2." It would appear that at some stage the labelling has been altered or the light circuits added to the RCD. This was existing work at the time of our rewiring the faulty power circuits and as such unable to be defected. The defect that would be applicable if the work was not pre existing would be graded as "minor" by Energy Australia as it is not immediately dangerous to life, health or property. Hutchings Electrical however has rectified this.
48. The second instance regarding clause 2.9.4.2 states;" There was an intermixture of supply between the power circuit in the garage and the lights in the filing room at the rear of the garage and laundry which was contrary to the requirements of AS/NZS 3000:2000 clause 2.9.4.2."
In response to this I disagree that this was a wiring issue but merely a labelling issue. (i.e. A light can be on a power outlet circuit so long as the wiring is the correct size and the circuit breaker is labelled to identify the intermixture). Once again this is classified by Energy Australia as a "minor" defect as it is not immediately dangerous to life, health or property. Hutchings Electrical has rectified this issue.
49.The report regarding clause 5.5.4.2 states; "The earthing link installed at the rear of the hinged panel of the metallic switchboard enclosure was not provided with a cover to prevent contact with single insulation conductors installed on the rear of the hinged panel as required by AS/NZS 3000:2000 clause 5.5.4.2."
The earth link was existing and as such complies with the regulation by which it is covered. If a defect were applicable it would be ruled by Energy Australia to be "minor" as the situation is not immediately dangerous to life, health or property.
Hutchings Electrical has however rectified the discrepancy so it now complies with current regulations.
50. The second instance regarding clause 5.5.4.2 states; "The main earth connection to the earth electrode installed below the main switchboard was not adequately protected against mechanical damage as required by AS/NZS 3000:2000 clause 5.5.4.2.
(a) Under the MEN system of earthing if the main earth is broken the smaller earth bond to the water pipe becomes the main earth increasing the risk of shocks to the occupants of the installation,"
In response, the defect was classed minor by Energy Australia as it is not immediately dangerous to life, health or property. Hutchings Electrical rectified the situation once advised by Energy Australia. This type of defect is dependant on the opinion of the particular inspector at the time of inspection and does vary dependant on their interpretation of the situation.
51. The report regarding clause 5.8.3.1 states; "The 7/.036 equipotential bonding conductor installed on the metallic switchboard enclosure was not of adequate cross-sectional area to protect the 16mm consumer mains, as required by AS/NZS 3000:2000 clause 5.8.3.1."
This statement when used in reference to existing work as is here, is irrelevant. The 16mm consumer mains and the bond to the box were existing and as such fully comply with their relevant regulation. Please note that the installation had been operating like this for approximately 30 years.
52. In response to paragraph 8, which states; "In view of the inspector, the defects were likely to present as an unacceptable increase in the risk of the house's occupants sustaining a shock or death"
Of the five instance listed, 3 were existing works and complied with the regulations relevant to when they were installed. One was questionable to interpretation and minor in nature. The final instance was a minor labelling issue. There was in fact no significant increase in risk of shock or death to the occupants."
60 Mr Davie submitted that Mr King’s evidence that he identified five defects is uncorroborated and should be treated with caution. He asked the Tribunal to note that of these alleged defects, none were thought worthy or rectification or explanation to the customer by the inspector. All are minor. Three were existing and, of those, two have been rectified notwithstanding that they were existing. One was questionable in interpretation and minor in nature. The last was a minor labelling issue.
Findings in relation to this allegation
61 While I accept that there is scope for differing opinions as to the interpretation of the Regulations, I accept the evidence presented on behalf of the Commissioner. In the circumstances I find as the fact that the defects identified by the Commissioner are proven. I am satisfied that these defects constitute improper conduct for the purposes of section 51 of the Act. I note the evidence of the rectification work undertaken by the Company and I agree that these defects were minor.
D. Issues relating to defective work and breach of statutory warranties at 21 Valley Road, Balgowlah Heights
The Commissioner’s case
62 Ms Pruden (the owner) provided a statement dated 22 November 2001, concerning her dealings with the Company and Mr Hutchings.
63 The Commissioner alleges that the Company carried out installation work that does not comply with the Australia Wiring Rules (AS3000-1991), contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998.
64 On 24 September 2001 Mr King carried out an electrical inspection of the premises at 21 Valley Road, Balgowlah and provided a statement of his inspection. Mr King identified defects where installation work did not comply with AS3000-1991. These include:
(i) The main earthing conductor did not adequately protect the 16mm2 active of the consumer mains. (p.122) This is contrary to Table 5.1 of AS3000-1991.
(ii) The neutral conductors associated with the power circuits and the surge diverter were not identified as required. (p.123) This is contrary to clause 2.23.5.4 of AS3000-1991.
(iii) The 4mm2 earthing conductors associated with the surge diverter was not maintained throughout its entire length and it connected to the existing main earthing conductor, contrary to the standard and the manufacturer's instructions. (p.124) This is contrary to clause 5.8.2.1 of AS3000-1991.
(iv) The equipotential bonding conductor installed on the metallic switchboard was not of an adequate cross-sectional area to protect the consumer mains as required. (p.125) This is contrary to clause 5.8.2.4 of AS3000-1991.
(v) The neutral conductors associated with the air conditioning final sub-circuit did not correspond with the active conductor as required. (p.126) This is contrary to clause 2.23.5.4 of AS3000-1991.
65 Mr Mazey’s evidence is that on about 14 September 2001 he undertook an inspection of the electrical work at 21 Valley Road, Balgowlah. Following the inspection he produced a report which detailed breaches of the AS/NZS 3000:2000 and he subsequently issued a Defect Notice to the Company on 22 October 2001. The notice identified a number of defects, where installation work did not comply with AS/NZS 3000:2000, contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998. The defects identified in the notice include:
(i) The main earthing conductor was not of an adequate cross sectional area in relation to the 16mm2 consumers mains. This is contrary to clause 5.6.1 of AS/NZS 3000:2000.
(ii) The neutral conductors associated with the power circuits and surge diverter were not identified. This is contrary to clause 2.9.4.4 of AS/NZS 3000:2000.
(iii) The neutral conductor associated with the air conditioning unit did not correspond with its active conductors as marked on the circuit breaker. This is contrary to clause 2.9.4.4 of AS/NZS 3000:2000.
(v) The 4mm2 earthing conductor associated with the surge diverter was reduced in size behind the hinged panel (manufacturers instructions required 4mm2 as minimum). This is contrary to clause 5.5.1 of AS/NZS 3000:2000.
The Applicants’ case
66 Mr Hutchings provided statements addressing each of the issues raised. In his statement dated 17 October 2002 he stated:
"117. In the statement number (123) Mr. King states; "The neutral conductors associated with the power circuits and the surge diverter were not identified as required by AS 3000- 991 clause 2.23.5.4."
118. In response to number (123) this was rectified as per the defect notice issued. It is classified as a minor defect by Energy Australia inspectors.
119. In the statement number (124) Mr. King states; "The 4mm earthing conductors associated with the surge diverter was not maintained throughout its entire length where it connected to the existing 7/.036 main earthing conductor, which was contrary to the manufactures instruction and AS 3000-1991 clause 5.8.2.1. A 4mm to 6mm earthing conductor was required."
120. In the statement number (125) Mr. King states; "The 7/.036 bare equipotential bonding conductor installed on the metallic switchboard enclosure was not of adequate cross sectional area to protect the 16mm consumer mains, as required by AS 3000-1991 clause 5.8.2.4.
121. In response to numbers (124 and 125). 1 advised the customer of the undersized existing main earth, and recommended to her that it be upgraded to a 6mm cable. The 7/.036 bonding conductor used to earth metallic switchboard enclosure was existing works as were the 16mm consumer mains and main earth. As such they fall under the category of existing works and comply with the relevant regulations. I do not agree with the opinion of Mr. King and his use of the Regulation AS 3000-1991 clause 5.8.2.1 where he states that a 4-6mm earthing conductor was required. AS/NZS 3000:2000 clause 5.5.1.2 states that the minimum size required is 2.5mm. See copy of regulation annexed here to.
122. In the statement number (126) Mr. Kings states; "The neutral conductors associated with the air conditioning final sub-circuit did not correspond with the active conductor as required by AS 3000-1991 clause 2.23.5.4."
123. In the statement number (127) in reference to the interview with myself over this installation Mr. King states; "In lines 4892 to 5059 I am of the opinion that Mr. Hutchings has again;
(a) Difficulty identifying the defect
(b) His responsibilities in regards to rectifying defects.
124. In response to number (126 and 127). Hutchings Electrical has rectified all of the minor defects including those disputed as being incorrectly issued to Hutchings Electrical."
67 In his statement dated 23 February 2003 Mr Hutchings stated:
"63. In response to paragraph 4, which states; "On 24 September 2001 a departmental inspector carried out an inspection of the site. He observed that the wiring was serviceable and in his view did not require replacement. He also observed 5 instances where electrical work attributed to the Company had been carried out contrary to AS 3000:1991 (Cause 2.23.5.4, 5.8.2.1, and 5.8.2.4)
It would appear that Ms Pruden is confusing the necessity to re-wire her main earth and water pipe bond with here house wiring. There was never any suggestion that Ms Pruden's wiring was not serviceable.
64. The first and second instances mentioned are relating to clause 2.23.5.4 which states; "The neutral conductors associated with the power circuits and the surge diverter were not identified as required by AS 3000- 991 clause 2.23.5.4."
This is a minor labelling issue relevant to qualified persons who have access to the meter box. It causes no safety concern to the customer or to a qualified technician. It would be classified as a minor defect by Energy Australia. Hutchings Electrical rectified this labelling issue.
65. In response to the instances involving clauses 5.8.2.1 and 5.8.2.4 which state; "The 4mm earthing conductors associated with the surge diverter was not maintained throughout its entire length where it connected to the existing 7/.036 main earthing conductor, which was contrary to the manufactures instruction and AS 3000-1991 clause 5.8.2.1. A 4mm to 6mm earthing conductor was required." And "The 7/.036 bare equipotential bonding conductor installed on the metallic switchboard enclosure was not of adequate cross sectional area to protect the 16mm consumer mains, as required by AS 3000-1991 clause 5.8.2.4.
I advised Mrs Pruden of the undersized existing main earth, and recommended to her that it be upgraded to a 6mm cable. The customer advised me that she was happy with the working order of the mains and she would contact the original electrician if an issue arose. The 7/.036 bonding conductor used to earth metallic switchboard enclosure was existing works as were the 16mm consumer mains and main earth. As such they fall under the category of existing works and comply with the relevant regulations. These instances were not the responsibility of Hutchings Electrical as the regulations applying to existing works are different to the ones used in this situation.
66. In response to paragraph 5, which states; "On 22 October 2001 an Energy Australia installation inspector carried out an inspection of the site. He observed 5 instances where the work failed to comply with AS/NZS 3000:2000 (Clauses 2.9.4.4, 5.5.1 and 5.6.1) The inspector issued a defect notice to the Company, which required it to rectify the stated defects within a 21 day period"
67. The defect notice, annexed here to was received by Hutchings Electrical listing four defects;
(a) The main earthing conductor was not of adequate cross sectional area in relationship to the 16mm consumer mains. Rule reference: AS/NZS 3000:2000;5.5.1
(b) The neutral conductors associated with the power circuits and surge diverter were not identified. Rule reference AS/NZS 3000:2000;2.9.4.4.
(c) The neutral conductor associated with the air conditioning unit did not correspond with its active conductors marked on the circuit breaker Rule reference AS/NZS 3000:2000;2.9.4.4
(d) The 4mm earthing conductor associated with the surge diverter was reduced in size behind the hinged panel (manufacturer's instruction required 4mm as minimum) AS/NZS 3000:2000; 5.5.1
In response to defect (a), the consumer mains were not installed by Hutchings Electrical., and therefore we should not be held responsible. The defect and cost to rectify had been explained to the customer at the commencement of the job. Mrs. Pruden did not wish to proceed with this work.
In reply to defect (b) and (c) these were minor labelling issue relevant to qualified persons who have access to the meter box. It causes no safety concern to the customer or to a correctly qualified technician. It is classified as a minor defect by Energy Australia. Hutchings Electrical rectified this labelling issue. In response to defect (d), The reason for this defect is that the 4mm earthing conductor associated with the surge diverter was bonded onto the existing main earth conductor, which was undersized. The customer had been advised of this problem and had advised us that she would take it up with the previous electrician if she deemed necessary.
All of these defects are classified as minor by Energy Australia as they pose no immediate danger to life health and property. They have since been rectified by Hutchings Electrical at no cost to the customer, including the main earth and water pipe bond upgrade, which was initially, estimated at $450.
68 Mr Davie submitted that Mr King’s evidence that he identified five defects is uncorroborated and should be treated with caution. He asked the Tribunal to note that of these alleged defects, none were thought worthy of rectification or explanation to the customer by the inspector. Two were existing work. The other three were minor labelling issues that have been rectified.
Findings in relation to this allegation
69 Again, I accept the evidence presented on behalf of the Commissioner. In the circumstances I find as the fact that the defects identified by the Commissioner are proven. I am satisfied that these defects constitute improper conduct for the purposes of section 51 of the Act. I note the evidence of the rectification work undertaken by the Company and I agree that these defects were minor.
E. Issues relating to defective work and breach of statutory warranties at Unit 5, 1 Bond Street, Mosman
The Commissioner’s case
70 Ms Louisson, the owner of Unit 5, 1 Bond Street, Mosman, provided a statement dated 21 December 2001, concerning her dealings with the Company and Mr Hutchings.
71 The Commissioner alleges that the Company carried out installation work that does not comply with the Australian/New Zealand Wiring Rules (AS/NZS 3000:2000) contrary to clause 7 of the Electricity Safety (Electrical Installations) Regulation 1998.
72 The evidence is that Mr King carried out an inspection of the electrical work at the premises on 21 December 2001 and provided a statement in which he identified a defect, where work did not comply with AS/NZS 3000:2000:
(i) a 2.5mm2 earthing conductor was not installed with the 6mm2 conductors, to earth the oven/cooktop as required. This is contrary to clause 5.2.2 of AS/NZS 3000:2000.
The Applicants’ case
73 In Mr Hutchings’ statement dated 17 October 2001 he offered a response to the Commissioner’s allegation. He states:
"125. In the statement number (129) Mr. King states; "I refer to the document "Do and Charge" Customer No#2015 issued by Hutchings Electrical Pty. Ltd. the description of work, "installed new 6mm cable to oven/cook-top and upgrade circuit breaker to 32 amp
(a) This work was not warranted to rectify the problems with the cook-top.
(b) A increase in load. That is, a larger oven/cook-top installed would warrant installing larger final sub-circuit conductors.
(c) However, normally if the conductors of an oven/cook-top final sub-circuit failed, the failed conducts are replaced with conductors of equivalent size. In this case 4mm.
126. In response to number (129). The installing electrician and myself checked this job. We both came to the same conclusion. The circuit was overloaded as it was rated at 25amp with a potential maximum load of 35amp. When the load was applied the circuit breaker tripped. See annexed here to AS/NZS 3000:2000 clause 3.4.1. Current carrying capacity. Every conductor shall have a current carrying capacity in accordance with the AS/NZS 300 8.1 series, not less than the current to be carried by the conductor. The rewiring of the circuit was required.
127. In the statement number (130) Mr. King states; "I refer to the document "Tax invoice" dated 15 September 2000 issued by Hutchings Electrical Pty Ltd. Under the heading -description , "installed new 6mm cable to oven/cook-top and upgrade circuit breaker to 32A. Materials- 14m, 6mm building wire.
(a) A 2.5mm earthing conductor was not installed with the 6mm conductors to earth the oven/cook-top as required by the requirements of clause 5.2.2 of AS/NZS 3000:2000.
(b) The protective-earthing conductors should be incorporated in the same wiring enclosure as the associated active conductors.
128. In response to number (130). As the work was classified as a repair the use of existing earthing conductor is the correct procedure. See copy of Mr. King's statement with regards to 12 Wellman Road Forestville annexed here to which verifies this.
74 Mr Hutchings provided further statements dated 23 February 2003, in which he offered these following additional comments in relation to the Commissioner’s allegations:
"73. In response to paragraph 1, which states; "During August 2000 Mr Hutchings, on behalf of the Company contracted with Ms L Louisson to install a larger capacity cable to supply electricity to a kitchen cooktop. When used, the appliance would trip the unit's circuit breaker. Mr Hutchings stated to Ms Louisson that the existing cable was inadequate to meet the load of the hotplates and cooktop and that a larger capacity cable was required to rectify the problem The combined load of the hotplates and the oven was 35 amps, whilst the circuit breaker was of 25 amps capacity."
74. I would like to clarify the events of the initial contact with Ms Louisson as follow;
I went to the home of Ms. Lourdes Louisson at 5/1-3 Bond Street Mosman at the verbal request of a "no charge" visit. She asked that I provide an opinion as to why her stove circuit was intermittently tripping.
On first inspection I noted the cook top to be showing signs of extreme neglect and disrepair.
I advised Ms. Louisson that rather than spending money on repairing the cook top if and when that was required that it would be wiser to replace it. I gave no price to do this I recommended she go directly to a supplier.
I switched the cook top and oven on for one to two minutes. All elements were operating correctly.
While all the elements were on the circuit tripped, ceasing power supply to the cook top and oven.
Ms. Louisson advised me that this was the problem that had been occurring regularly. This is clarified in the witness statement she provided for the DFT in points (3) and (5), which is annexed here to.
I checked the distribution switchboard located downstairs and found that the 25amp circuit breaker had tripped. As this had tripped in overload and a walloven/hot plate circuit is generally wired in either two twenty amp circuits or one thirty two amp circuit I deduced that the circuit was simply being overloaded.
I gave Ms. Louisson a verbal estimate to install a new circuit from the switchboard to the cook top.
75. In response to paragraph 2, which states; "On 14 September 2000 the Company carried out the work, but left the cooktop disconnected. The Company charged Ms Louisson $583 for this work. The Company then refused to connect the cooktop until she paid an additional $77. In the Company's view, one of the hot plate elements required replacement."
I would like to clarify the details of the visit made on 14 September 2000 by Mr Thorpe, a copy of his statement is annexed here to. It states as follows;
I went to 5/1-3 Bond Street Mosman, the home of Ms Louisson on the 14th September 2000. I had an apprentice with me to help with the job.
I discussed the job with Ms. Louisson then proceeded by writing up a service agreement, which she signed. A service agreement is annexed here to.
I had been advised that the stove circuit required rewiring.
From the description of the problems that Ms. Louisson was experiencing it sounded like the circuit was indeed overloading.
Ms. Louisson advised me that occasionally when she was using the oven and hot plates together the circuit breaker would trip. Necessitating her to go downstairs to the switchboard to reset it. She said it would always reset but the procedure was a nuisance.
I checked the rating of the hotplates and the oven and calculated that the combined load with both appliances operating would be approximately 35amp.
The circuit was rated at 25amps and protected by a 25amp circuit breaker. With the load being up to 35amps I agreed with the appraisal that had been given by Hutchings Electrical that rewiring was required.
I commenced the rewiring.
I changed the overloaded 25amp circuit to a new 32amp circuit, which would now be sufficient to carry the load of the cook top and wall oven.
On completion of the wiring I turned the cook top on to have a faulty element blow. Ms. Louisson had left the home at this stage so I wrote to her to explain the added complication of a faulty stove element. I made a note of the part number so I could arrange for it to be replaced if Ms. Louisson desired.
An important point I would like to make here is that the diagnosis of the cabling being undersized and requiring replacement is a separate and additional issue to the state of repair of the hotplate/oven. From our initial visit we noted and commented on the poor state of repair of the unit.
Prior to the circuit being replaced we believed the cooktop/oven to be in working order.
Due to the absence of Ms. Louisson on completion of the works and the additional complication of a faulty element we left the unit disconnected until we could clarify with her whether she would like to replace the whole unit or undertake repairs. After two weeks she advised that she would like the remaining operable elements connected and the faulty element left disconnected. This work was undertaken on 29 September 2000 as per invoice annexed here to at which time both accounts were settled ($583 and $77).
The two week delay between visits was simply waiting for Mrs. Louisson to make a decision.
76. In response to paragraph 3, which states; "On 29 September 2000 the work was completed and the appliance connected Ms Louisson experienced the same problem with use of the cooktop tripping the circuit breaker. She contacted the Company and Mr Hutchings advised her that he was not responsible and that rectification would require further payment."
Hutchings Electrical did not contract to repair or replace Ms Louissons cooktop, We acted in good faith with the information at hand and replaced an overloaded circuit. We advised her that to carry out ongoing repairs to her cooktop she would incur an additional charge.
77. In response to paragraph 4, which states; "During November 2000 Ms Louisson lodged a complaint against the Company with the Department. She had received advice from another electrician that the pre-existing cable was not the cause of the problem and that there was no need for the work to have been provided by the Company. Faulty hotplate elements were replaced and the circuit breaker ceased to trip when the hotplates and oven were used".
There were two separate issues in regards to Ms Louissons cooktop. One was the overloaded cable which was diagnosed in August, the other being the ongoing deterioration and poor condition of the appliance, which from the start was explained to Ms Louisson. The immediate issue that was apparent at our initial visit was rectified. To claim that the undersized cable was never an issue is incorrect. The fact that there were ongoing problems with the faulty elements, which also caused the circuit breaker to trip, is a separate issue.
78. In response to paragraph 5, which states; "Ms Louisson also lodged an application against the Company before the then Fair Trading Tribunal. It subsequently found in Ms Louisson's favour and ordered the Company to pay her $1735.
I was unable to attend the hearing and therefore had no opportunity to clarify the circumstances surrounding Ms Louisson's repairs. I do not agree with the findings of the tribunal however paid as directed.
79. In response to paragraph 6, which states; "On 21 December a departmental inspector carried out an assessment of the site. During the course of the physical assessment he observed that the cooktop had not been adequately earthed contrary to AS/NZS 3000:2000 (Clause 5.2.2)."
The instance to which this refers states; "I refer to the document "Tax invoice" dated 15 September 2000 issued by Hutchings Electrical Pty Ltd. Under the heading - description, "installed new 6mm cable to oven/cook-top and upgrade circuit breaker to 32A. Materials - 14m, 6mm building wire.
(a) A 2.5mm earthing conductor was not installed with the 6mm conductors to earth the oven/cook-top as required by the requirements of clause 5.2.2 of AS/NZS 3000:2000.
(b) The protective-earthing conductors should be incorporated in the same wiring enclosure as the associated active conductors.
This work is classified as a repair; the use of the existing earthing conductor is the correct procedure. "
75 Mr Davie submitted that the facts are that Mr Hutchings was asked to give his opinion on the day as to why a circuit breaker kept tripping and he did so. The only allegation relating to workmanship that could be considered to be defective is that the cooktop had not been adequately earthed. There is no evidence to support this allegation, merely an assertion from Mr King. Mr Hutchings disputed the assertion but his evidence was not explored in cross-examination.
Findings in relation to this allegation
76 The determination of this issue effectively requires a finding with respect to the credibility of both Mr Hutchings and Ms Louisson. In the absence of Ms Louisson this is not possible. In the circumstances I cannot be satisfied that this allegation is proven all that it constitute improper conduct for the purposes of section 51 of the Act.
F. Issues relating to home warranty insurance
The Commissioner’s case
77 Section 92 of the Act provides for home warranty insurance. That section provides:
"92 Contract work must be insured
(1) A person must not do residential building work under a contract unless:
(a) a contract of insurance that complies with this Act is in force in relation to that work in the name of the person who contracted to do the work, and
(b) a certificate of insurance evidencing the contract of insurance, in a form prescribed by the regulations, has been provided to the other party (or one of the other parties) to the contract.
Maximum penalty: 200 penalty units.
(2) Except as provided by section 94 (1A), a person must not demand or receive a payment under a contract for residential building work (whether as a deposit or other payment and whether or not work under the contract has commenced) from any other party to the contract unless:
(a) a contract of insurance that complies with this Act is in force in relation to that work in the name of the person who contracted to do the work, and
(b) a certificate of insurance evidencing the contract of insurance, in a form prescribed by the regulations, has been provided to the other party (or one of the other parties) to the contract.
Maximum penalty: 200 penalty units.
(3) This section does not apply if the contract price does not exceed $5,000 or (if the contract price is not known) the reasonable market cost of the labour and materials involved does not exceed $5,000.
(4) If the same parties enter into two or more contracts to carry out work in stages, the contract price for the purposes of subsection (3) is taken to be the sum of the contract prices under each of the contracts.
(5) The regulations may prescribe another amount for the purposes of subsection (3) and an amount so prescribed is to apply in the place of the amount referred to in that subsection.
(6) To avoid doubt, this section extends to residential building work that is also owner-builder work."
78 As has been noted above, Mr Hanlon's decision states:
"When interviewed Mr Hutchings agreed that on two separate occasions the Company failed in its statutory duty to provide to its clients home warranty insurance in accordance with section 92 of the Act. In one case, the certificate evidencing the existence of home warranty insurance was not provided within the time stipulated. The certificate was provided after the work had been completed.
Whilst in the second case, the Company failed totally to provide home warranty insurance. Mr Hutchings explained that this had resulted from a clerical error and that a new protocol had been instigated to prevent this from occurring in future.
Failure to provide home warranty insurance is a serious contravention of the Act."
79 The Commissioner alleges that with respect to the work undertaken at 77 Ellery Parade, Seaforth the Company did not provide home warranty insurance to the customers prior to commencing work or prior to receiving payment for the work, contrary to section 92(1)(b) of the Act. Evidence provided by the homeowners states that work commenced on the same day that the quotation was provided on 27 March 2000. They received a Mastercover Policy, certificate of insurance in the post in about May 2000.
80 With respect to the work undertaken at 53 Darley Street, Forestville, evidence provided by the owners states that they did not receive a certificate of insurance in relation to the work.
The Applicants’ case
81 In Mr Hutchings’ statement dated 23 February 2003, he offered the following response to the Commissioner’s allegation:
"45. In response to paragraph 6, which states: "During the course of the Department's investigation it was determined that the Company failed to provide home warranty insurance coverage for this work. When interviewed, Mr Hutchings stated that this had occurred due to a clerical error"
Hutchings Electrical held a blanket cover for Home Warranty for all jobs over $5000, the certificates were issued via our office, and it was an oversight that a certificate was not provided for this job. A blanket cover means that we have automatic cover available and are only required to lodge the individual job details."
82 Mr Davie submitted, on behalf of applicants, that the evidence does not support this allegation.
Findings in relation to this allegation
83 I agree with the Commissioner’s assertion that a failure to provide home warranty insurance is a serious breach of the Act. However, I am not satisfied that the evidence shows that the Company failed to provide that insurance. I accept that the Company held a blanket cover for Home Warranty for all jobs over $5000 and therefore insurance was in place at both at 77 Ellery Parade, Seaforth and 53 Darley Street, Forestville. I also accept that the Company’s failure to provide home warranty insurance certificates as required by section 92 of the Act was due to an administrative error. In the circumstances I am not satisfied that this breach constitutes improper conduct for the purposes of section 51 of the Act.
G. Issues relating to contracts and promotional advertising
The Commissioner’s case
84 Clause 63 of the Home Building Regulation 1997 provides:
"63 Advertising
In any advertisement of any kind relating to the doing or contracting to do residential building work or specialist work, or supplying or contracting to supply a kit home by the holder of a contractor licence, the following details must be included:
(a) if the holder is an individual:
(i) the holder's name or, if the holder has a business name registered under the Business Names Act 1962 in respect of the work or kit homes to which the contractor licence applies, that business name, and
(ii) the number of the contractor licence held by the individual,
(b) if the holder is a partnership:
(i) the names of all the members of the partnership or, if the partnership has a business name registered under the Business Names Act 1962 in respect of the work or kit homes to which the contractor licence applies, that business name, and
(ii) the number of the contractor licence held by the partnership,
(c) if the holder is a corporation:
(i) the name of the corporation or, if the corporation has a business name registered under the Business Names Act 1962 in respect of the work or kit homes to which the contractor licence applies, that business name, and
(ii) the number of the contractor licence held by the corporation.
Maximum penalty: 10 penalty units."
85 The Commissioner alleges that the Company advertised the doing of residential building work and failed to include the Company's licence number in the advertisement, contrary to clause 63(c)(ii) of the Regulation.
86 Mr and Mrs Weber stated that they received a pamphlet in their letterbox at 12 Wellman Road, Forestville, in about January 2001. The pamphlet was in the Company name and advertised the installation of an electrical safety switch. The pamphlet did not include the Company's contractor licence number.
87 As previously noted, Ms Pruden provided a statement dated 22 November 2001, concerning her dealings with the Company and Mr Hutchings.
88 She stated that in about April 1999 she received a brochure in her letterbox at 21 Valley Road, Balgowlah Heights that advertised the installation of a surge diverter designed to protect a home for $99.00. The brochure included the Company name and did not include the Company's contractor licence number as required, yet it advertises the doing of residential building work.
The Applicants’ case
89 Mr Hutchings conceded that he had not complied with the requirements of clause 63 of the Regulation. His evidence is that he has taken steps to address this issue.
90 Mr Davie submitted that it is apparent from the copy of a page from the Sydney Yellow Pages that was put in evidence and which contains the Company's advertisement, that many other contractor have also failed to comply with this requirement. He argued that The Commissioner has failed to take action in relation to these other contractors and apparently regards this as a low priority.
Findings in relation to this allegation
91 It is my understanding that the applicants have conceded their failure to comply with the Regulation. The evidence is that the Company has taken steps to address the issue. In the circumstances I am satisfied that this failure constitutes improper conduct for the purposes of section 51 of the Act however, in my opinion it is minor.
H. Issues relating to improper conduct under the Act and the Company's method of doing business.
The Commissioner’s case
92 Section 44 of the Fair Trading Act 1987 provides:
"44 False representations
A person shall not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
...
(j) make a false or misleading representation concerning the need for any goods or services, ..."
93 The Commissioner alleges that the Company adopted practices in contravention of this provision. It is alleged that the Company engaged in a practice of providing quotes for work and then, once they have been contracted to do work for a consumer, asserting a need for extensive and expensive additional work to be done. In some cases this assertion as to the need for additional work has been accompanied by reference to the importance of making the electrical installation safe for the consumer's children. It is further alleged that there was no need for much of this work. In each case where the assertion was made that additional work was required there was a very significant increase in the cost of the work. This was a deliberate ploy by the Company to generate additional revenue.
94 In Mr Hanlon's decision he states:
"To obtain new business, the Company distributes leaflets promoting the supply and installation of safety switches for a fixed price of $99. Clients who respond to this promotion would also receive a "10 point safety check", which later became a "157 point safety check". During these safety checks, the Company's electrician would make a visual check of the house's wiring installation to detect for any faults. The rectification of these faults would be at an additional cost to the consumer.
When interviewed by departmental investigators on 4 February 2001, Mr Hutchings agreed that the use of the offer to fit safety switches was "to build up business". He agreed that the supply and installation of the safety switches for $99 was done at a loss to the Company. He also agreed that his employed electricians were on wages, but could gain an additional 3% commission for any accepted quote for additional work."
95 Mr Hanlon concluded:
"The Company has taken advantage of consumers' perceptions that the Company and its representatives have specialised knowledge of electricity. The Company and its representatives have taken advantage of consumers' perceptions that electricity is inherently dangerous and they have taken advantage of consumers' perceptions that it is imprudent to ignore faulty electrical installations.
I am satisfied that the Company has engaged in predatory conduct where it took advantage of its position as a licensee in an area of specialist work and misrepresented to consumers the need for such specialist work to be carried out by them.
96 With respect to the property at 12 Wellman Road, Forestville it is alleged that the Company made false representations in relation to the need for electrical work. On 15 January 2001 Mr Marsh on behalf of the Company attended the property following Mr Weber's request to install a safety switch. On 22 January 2001 Mr Mathieson, an employee of the Company attended the property to carry out work and advised that there were further problems that made the home dangerous. A contract was entered into on behalf of the Company to do further work for the sum of $1,690.
97 The owners of 77 Ellery Parade, Seaforth, provided statements concerning their dealings with the Company and Mr Hutchings. The evidence is that they paid $9,740.00 to the Company in relation to this work on 4 April, 2000. Mr King’s evidence is that it not necessary to carry out work listed in quotation (2290) provided by the Company in order to rectify problems experienced by the homeowners.
98 Ms Pruden provided a statement concerning her dealings with the Company and Mr Hutchings in relation to 21 Valley Road, Balgowlah Heights. Ms Pruden stated that she was told by Mr Hutchings on 6 May 1999 that her house needed rewiring. Mr Hutchings advised that the approximate cost of the work would be $4500. Ms Pruden further stated that she obtained opinions from three other electricians who all advised that it was not necessary to rewire the house. Ms Pruden did not have any further electrical work carried out on the premises. On 24 September 2001 Mr King carried out an electrical inspection of the premises at 21 Valley Road, Balgowlah and advised that the electrical wiring was in a good condition and did not warrant replacement at the time of the inspection.
99 Mrs Cutcliffe, the owner of 17 Bedford Crescent, Collaroy, provided a statement concerning her dealings with the Company and Mr Hutchings. On 10 May 2001 Mr Marsh provided a quotation on behalf of the Company. The quotation contains a heading "Description of additional work required" and includes the statement "complete rewire of lighting and power circuits and consumers mains throughout the house" plus additional work for the approximate cost of $8000 labour only. On 26 September 2001 Mr King carried out an electrical inspection of the premises. In his statement he advised that the majority of the electrical wiring of the installation was in a serviceable condition, with a minor part requiring urgent attention. A full rewire of the premises was not warranted.
100 Ms Louisson provided a statement concerning her dealings with the Company and Mr Hutchings with respect to Unit 5, 1 Bond Street, Mosman. Ms Louisson stated that Mr Hutchings advised her that a cable supplying her cooktop should be upgraded from a 4mm cable to a 6mm cable, as the existing cable was not adequate to handle the electrical load from the cooktop. Mr King carried out an electrical inspection of the premises on 21 December 2001 and advised in his statement that the installation of a 6mm cable was not required. Ms Louisson obtained an independent inspection report in relation to the issue and was advised that no fault could be found on the old 4mm sub circuit originally supplying the cooktop and oven to warrant replacing/upgrading cables to 6mm.
101 Mr Wilson argued that consumers’ statements should be accepted and preferred to that of Mr Hutchings. The fact that a customer signed a contract with the Company on the same day that she received a quotation suggests that she relied on what had been said to her. It is also significant that the Company’s brochure referred to child safety. The owners of the properties at Wellman Road, Ellery Parade, and Darley Street all indicated that they had been told that their situation was dangerous. Each entered into a contract on the same day as a quotation was provided. Mr Wilson submitted that these consumers agreed to spend significant sums of money because they had been told that it was dangerous. Some had been misled into having the work done because they had been misled in this way.
The Applicants’ case
102 The applicants have hotly contested these allegations. Mr Davie submitted that there may be more than one opinion in relation to the necessity for work. It is a matter of judgment. Some allegations have been made that the applicants have omitted work by other situations that have been overcautious. In every case customer was presented with a range of options and customer chose from those options. He urged the Tribunal to be cautious in adopting hindsight opinions.
Findings in relation to this allegation
103 While I consider that there is some merit in Mr Hutchings' argument that there is scope for differing opinions in relation to whether or not particular work is necessary, I agree with Mr Hanlon's findings in relation to the Company's conduct. From the evidence before me it is clear the Company has deliberately set out to instil a sense of fear in its customers in order to generate additional revenue for the Company. The situation was exacerbated by the commission-based arrangement between the Company and its employees. I am satisfied that the Company, through its employees, misrepresented or exaggerated to its customers the need for specialist work to be carried out. The Company has taken advantage of its customers fears for its own gain.
104 In the circumstances I am satisfied that this model of behaviour constitutes improper conduct for the purposes of section 51 of the Act. In my view, this is the most serious of the Commissioner’s allegations and greatly overshadows those that I have discussed above. The seriousness of this conduct cannot be overstated. I agree with Mr Hanlon's conclusion that the Company has engaged in predatory conduct.
I. Issues relating to supervision
The Commissioner’s case
105 Mr Hutchings is the Company’s nominated qualified supervisor, and he holds a qualified supervisor certificate. A qualified supervisor who is supervising any electrical wiring work must ensure that the work is done correctly. Pursuant to section 53 of the Act the holder of a supervisor certificate who has control over the carrying out of residential building work or specialist work of any kind is guilty of improper conduct if the requirements applicable to the work made by or under this Act or any other Act are not complied with, or a breach of a statutory warranty occurs in the course of doing that work, or in the case of specialist work, the work is done otherwise than in a good and workmanlike manner or faulty or unsuitable materials are used in the course of doing the work. Section 53(2) of the Act provides that the holder of a supervisor certificate is to be presumed, in the absence of evidence to the contrary, to have control over the doing of all work for which the holder is a nominated supervisor.
106 The Commissioner asserts that Mr Hutchings is ultimately responsible for the standard of work provided by the Company's employees. The Commissioner’s position is reasonably set out in Mr Hanlon's reasons where he states:
"I note that due to the specialist nature of electrical work each employee who carries out the work must be licensed in their own right or be personally supervised by someone who does hold the requisite category of licence. This does not remove the accountability of Mr Hutchings as the Company's nominated supervisor.
During his interview with departmental investigators, Mr Hutchings agreed that specific work performed by the Company's electricians was defective. He agreed that he was responsible for all facets of the Company's operation, in particular its "technical running". He stated that defects were "oversights" and "... are not acceptable ..." within the Company's operation. He described the procedures that were in place to monitor the work of the Company's electricians. He further stated that his electricians knew that the "... ramifications of poor workmanship is a formal warning which can result in termination", yet despite his employee's work being defected by the supply authority there is no evidence that any electrician received anything more than a reprimand was disciplined.
Additionally, Mr Hutchings attempts to mitigate the severity of the Company's conduct by stating that the detected defects were of a minor nature. I cannot accept this view. The Company's clients are entitled to receive work that is of the requisite standard. Indeed, a statutory obligation is placed on all installing contractors to ensure that the work is safe and appropriate for use. To this end, electricians are trained to test their own work and to certify as to its compliance. The Company arranged for its electricians to undergo a refresher course on testing procedures in February 2002. Notwithstanding their attendance, their work was still found to be defective.
Mr Hutchings' failure to ensure that the requisite standard of work is maintained indicates that he is either unwilling to act diligently in this regard, or is incapable of providing an adequate level of supervision. He has unsuccessfully attempted to deflect the blame for his failure to provide adequate supervision on others. Mr Hutchings submitted that the accuracy of the Energy Australia inspectors' trade related knowledge is inadequate and that this has contributed to a number of defects, having been withdrawn after he has disputed them. He further submitted that the number of defect notices issued to a licensed contractor is an ineffective guide as the contractor's competency on that basis."
The Applicants’ case
107 Mr Davie argues that there is confusion between the roles of nominated supervisor and qualified supervisor. He submitted that Mr Thorpe is also a qualified supervisor and there is no evidence to suggest that when Mr Hutchings did not supervise the Company’s work, that supervision was not undertaken by Mr Thorpe.
Findings in relation to this allegation
108 I agree with the Commissioner's assertion that Mr Hutchings is ultimately responsible for the standard of work provided by the Company's employees. It is my understanding that Mr Hutchings has accepted that this is the responsibility of a nominated supervisor. As an officer of the Company Mr Hutchings must accept the responsibility for the Company's actions. In the circumstances I am satisfied that the evidence has proven improper conduct for the purposes of sections 53 and 54 of the Act.
109 I note Mr Davie's submissions that no fraudulent intent or wilful conduct has been suggested against Mr Hutchings. The evidence shows that Mr Hutchings took on board all suggestions that were made to him and undertook rectification of any defects that were notified. I have not formed a view contrary to this submission. I consider that this is relevant to consideration of what action is to be taken against Mr Hutchings and I will discuss this further later in these Reasons.
Disciplinary Action - Submission
110 The Commissioner determined to permanently disqualify the Company from being the holder of any authority and to disqualify Mr Hutchings from being the holder of any authority for 10 years. Additionally Mr Hutchings was to pay $5,000.00 to the Commissioner as a penalty.
111 Mr Davie submitted that this was excessive. Mr Davie noted that a penalty of the nature imposed on the Company was appropriate only in the most serious of cases. He argued that the Tribunal should take account of all the circumstances of the applicants’ conduct. He urged the Tribunal to note that the Company had undertaken thousands of jobs and that the Commissioner’s case is limited to only six of them.
112 He argued that no fraudulent intent has been suggested and that if it had been it would need to be put robustly. He further urged a finding of no wilful conduct. This is indicated by the fact that the Company appropriately addressed any defects that were brought to its attention. All suggestions made were taken on board. There has not been persistent or chronic action. Where the applicants disagreed with the Commissioner’s interpretation of the applicable rules or legislation, the alleged defects were rectified and then the matter was argued.
113 Mr Wilson in contrast argued that there is evidence of defective work extending over a long period. This period extends from May 1999 to August 2002. Defect notices were issued in relation to 22 properties however Mr Hutchings only inspected four of those properties. As the nominated supervisor Mr Hutchings is responsible for the Company’s work. The fact that he failed to inspect the work that was the subject of the defect notices is a factor to be considered when weighing his fitness to hold an authority. The Tribunal could not be satisfied that this conduct would not reoccur.
114 Similarly, the Tribunal must take account of the statements provided by the Company’s customers. Their evidence should be preferred to that of Mr Hutchings. He argued that Mr Hutchings’ lack of insight into the gravity of his misconduct for the home owner is a factor to be taken into account: Stephens v Director General, Department of Fair Trading [2003] NSWADT 173.
115 Mr Wilson referred to the Director General, Department of Fair Trading v Cohen [2000] NSWFTT 3 where Judge K P O’Connor, Chairperson outlined a number of factors to be taken into account. His honour stated at paragraphs 44 – 45:
44) The Tribunal noted that in the submissions in support of the maximum penalty emphasis had properly been given to (1) deterrence, personal and general; and (2) the objectives and the consumer protection function of the licensing legislation. The Director General has similarly given these factors considerable emphasis in the submissions in these proceedings.
45) Alongside those factors the Tribunal considered that the following factors should be weighed:
a) the nature, width and extent of the contraventions
b) the loss or damage and prejudice in consequence of the contraventions
c) the circumstances in which the contraventions took place
d) whether the licensee has been to have engaged in any similar conduct
e) the presence of fraudulent or dishonest intent and deliberation on the part of the licensee
f) the extent of carelessness or wilfulness of the conduct
g) the efforts made to correct the situation and what measure have been taken by the licensee
h) what consciousness the licensee (a) had (b) displayed, of its obligations under the relevant statute and to the owners
i) the effect upon the licensee
j) antecedents
k) attitude, building history and future compliance
l) the penalty range.
116 In Hutchings -v- Commissioner of Police, New South Wales Police Service [2001] NSWADT 62 the Deputy President of this Tribunal observed at paragraphs 17 –19:
"17 The Tribunal has frequently quoted the decision in Australian Broadcasting Tribunal v Bond [1990] HCA 33; 1990 94 ALR 11 as a guide to the consideration of the meaning of "fit and proper". In that case, Toohey and Gaudron JJ said at 65, that:
The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.
...
19 The question Toohey and Gaudron JJ pose in the Bond Case should be addressed. Is the question when determining whether Mr Hutchings is a fit and proper person:
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; or
some other question."
117 Mr Wilson argued that it is not significant that some defects might be classified as minor. A breach is a breach and these provide sufficient grounds for the Tribunal to deal with the applicants on the basis of improper conduct under the Act.
118 Mr Wilson referred me to the decision of the Commercial Tribunal in Maurice Neville Hinchcliffe v Building Services Corporation Commercial Tribunal of NSW No. 1115 of 1995 (unreported) where it is stated at pages 22 – 27:
"[T]he purpose of legislation is to protect the public. The Tribunal has taken into account the appellant's remorse and contrition in coming to its decision: Clive Andreas Evatt, ACT Supreme Court, No 373 of 1987. Nevertheless, subjective matters cannot overtake the public interest. The same principles apply to builders in disciplinary proceedings and licensing matters as they do for barristers and medical practitioners: Buttsworth v Walton, Court of Appeal, 19 December 1991, unreported per Samuels JA 15:
"The subjective matter, however, seems to me to assume incorrectly that an order made by the Tribunal under section 32(r) of the Act is a punitive one ... but when the purpose of an order is to protect the public, these matters diminish in weight, if indeed they are left with any substance at all. Equally, the public interest in the appellant's continuing in practice must be weighed against the public interest in protecting patients from any repetition of the conduct exhibited in this case ...".
...
There are also numerous cases evaluating the fitness of an applicant to hold either a licence or a certificate. Isolated or passing departure from proper standards may not warrant the refusal of a licence but intention or extended conduct over a period of time is viewed differently: New South Wales Bar Association v Evatt [1968] HCA 20; (1968) 117 CLR 177 at 183; Ziems v Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279 at 298. Character evidence may be relevant, but each case must be assessed on its own particular circumstances.
In Clearihan v Registrar of Motor Vehicle Dealers in the Australian Capital Territory [1994] ACTSC 101; (1994) 122 ACTR 25 at 30, Miles CJ stated that each case must be assessed on its merits. In assessing the impact of past adverse findings on certain licence applications, it might not always be relevant. On the other hand, adverse determinations may point to a lack of appreciation of what is demanded by the licence, then consideration of them becomes important. The appellant has no such adverse determinations against him.
In determining whether a person is fit and proper to hold a licence, the Tribunal does not consider this in isolation. The whole of the conduct of the appellant is taken into account. Proper regard must be had of the context also of the regulatory regime: Young Taek Chong Hongv Tomazin (1994) ASC 56-283 at 58,984.
As already noted above, the intention of the Act is consumer protection. The accreditation of a person as a building contractor (or a qualified supervisor) under the Act means that a person can be held out to the public as being not only possessed of acceptable building expertise, irrespective of size or complexity, but is a person of integrity and honesty: Hughes & Vale Pty Limited v State of New South Wales 93 CLR
This jurisdiction has recognised the significance of the consumer protection aspect of licensing in a number of cases. In Bournelis v Building Services Corporation, Commercial Tribunal of New South Wales, 9 June 1995, unreported at 5, it is stated:
"Members of the public must have confidence in builders both from the perspective of standard of work and honesty. Consumers place their trust and their money in builders and often rely on their advice at times which are often stressful, that is, the renovating, extension or building of a home. Consumers must be sure that the confidence they place in builders is not abused. They should be able to assume that builders adhere to the proper standards of trust and honesty."
Findings in relation to what disciplinary action to take
119 In considering what disciplinary action to take I have taken account of all the factors referred to above. I am particularly cognisant of the fact that the purpose of disciplinary action is not to punish the applicants but to protect the public: Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186 at 201.
120 I have noted that most of the defects that I have found proven were of a minor nature. I also note however that the conduct has extended over a significant period of time and over many different sites. Of themselves, the particular defects are not such as would justify action as harsh as that determined by the Commissioner. 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 the conduct. In each case the Company made efforts to correct the situation when defects were brought to its attention. Nevertheless, the applicants’ conduct demonstrated a lack of quality control and inadequate supervision. Energy Australia has performed the supervisory role that Mr Hutchings should have been playing in relation to the Company.
121 I have indicated above that I agree with the Commissioner’s views with respect to the Company’s predatory conduct. The Company has demonstrated a wanton disregard for its obligations to its customers.
122 In my opinion the Commissioner was correct to cancel the Company’s authority and to permanently disqualify it from being the holder of any authority.
123 I am of the view, however, with respect to Mr Hutchings, that the period of disqualification was greater than is warranted by his offences. It is my view that a disqualification period of three years would be preferable. It is my view that Mr Hutchings’ failings are more the result of inadequate management ability than lack of trade skills or dishonesty. He lacks the foresight to understand the consequences of the incentive program that he put in place in the Company and risks associated with adopting the methods used to cultivate work opportunities. In my view he would benefit from management training before undertaking such a position in the future. Nevertheless, I do not believe that the protection of the public requires that he be excluded from the industry for a longer period than three years.
124 It is also my view that the consequence of the cancellation and disqualification of the Company and of Mr Hutchings is that he is likely to be financially strained. In those circumstances the imposition of a financial penalty would not, in my view serve to protect the public, but rather would have a punitive effect on Mr Hutchings. Given that decision, I do not consider it appropriate to impose a monetary penalty.
125 In relation to the Company case, therefore, the decision of the Tribunal is to affirm the Commissioner’s decision.
126 In relation to Mr Hutchings, the Commissioner’s decision is set aside. In substitution for that determination is the decision that Mr Hutchings be disqualified from holding a contractor licence for a period of 3 years.
Orders
1. I affirm the decision of the Commissioner for Fair Trading that the contractor licence issued to Hutchings Electrical Pty Limited is cancelled and that the Company is permanently disqualified 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, or
(c) an officer of a corporation that is the holder of an authority.
2. The decision of the Commissioner for Fair Trading in relation to the supervisor's certificate issued to Mr Steven Owen Hutchings is set aside. I substitute for that determination the decision that the supervisor's certificate issued to Mr Steven Owen Hutchings is cancelled and that Mr Hutchings be disqualified for a period of three 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, or
(c) an officer of a corporation that is the holder of an authority. Such period of disqualification is to take effect from 10 March 2003.
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URL: http://www.austlii.edu.au/au/cases/nsw/NSWADT/2004/23.html