Barakat v Building Professionals Board [2009] NSWADT 5 (12 January 2009)

Last Updated: 15 January 2009

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION:
Barakat v Building Professionals Board [2009] NSWADT 5


DIVISION:
GENERAL DIVISION

PARTIES:
APPLICANT
Barry Barakat

RESPONDENT
Building Professionals Board



FILE NUMBERS:
083108

HEARING DATES:
18 September 2008

SUBMISSIONS CLOSED:
18 September 2008



DATE OF DECISION:
12 January 2009

BEFORE:
O'Connor K - DCJ (President)Friedmann P - Non-Judicial Member





LEGISLATION CITED:
Administrative Decisions Tribunal Act 1997
Building Professionals Act 2005
Crimes Act 1900
Home Building Act 1989

CASES CITED:
Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321
Barakat v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 127
Burton v Anderson (NSWCA, unreported, 28 October 1994)
Ex parte Tziniolis; Re The Medical Practitioners’ Act (1966) 67 SR (NSW) 448
Good v. The Medical Board of Western Australia (SCWA, 6 December 1994)
McBride v Walton (NSWCA, unreported, 15 July 1994
Stojanovic v Commissioner for Fair Trading, New South Wales Office of Fair Trading (GD) [2008] NSWADTAP 84

TEXTS CITED:


APPLICATION:
Accredited Certifier – Cancellation of Accreditation – Application for Review of Board decision – Misrepresentation – Not Fit and Proper Person – Affirmed – Building Professionals Act 2005, s 8

MATTER FOR DECISION:



REPRESENTATION:
APPLICANT
J Conomos and F Coyne, counsel/Carneys Lawyers
RESPONDENT
A Grey, legal officer


ORDERS:
Decision under review affirmed.


Reasons for Decision:

REASONS FOR DECISION

1 The applicant, Barry Barakat, has applied to the Tribunal for review of a decision made on 2 April 2008 by the Building Professionals Board under the Building Professionals Act 2005 (the Act) cancelling his accreditation as an accredited certifier. As more fully explained below, the decision has been stayed subject to conditions pending this decision.

2 Mr Barakat has held accreditation since the commencement of the private certifier system in 1999. At the time of cancellation his accreditation extended to the following categories:

A2 – building surveying grade 2 (conditioned to class 1 and 10 buildings)

C8 – electrical services compliance

C9 – mechanical services compliance

C11 – energy management compliance (classes 3, 5 to 9)

C13 – building hydraulics compliance

C14 – building hydraulics compliance

C16 – specialist hydraulics services compliance.

3 He was born in 1953 in Lebanon and later settled in Australia. He obtained his academic qualifications which include an MBA at New South Wales tertiary institutions. He has substantial academic qualifications in engineering especially in the area of electrical engineering.

4 Between 1983 and 1997 he was a public servant working for the Department of Public Works. In 1997 he established his own business, BHB Australia Pty Ltd, which specialises in electrical and air conditioning contracting work, including the inspection and investigation of existing systems and consultancy work.

5 In deciding to cancel his accreditation the Board exercised the power given to it by paragraph (a) of s 8(2) of the Act. Section 8(2) (as it then stood) provided:

‘(2) The Board may suspend or cancel a person’s certificate of accreditation as an accredited certifier if:

(a) the person has been issued a certificate of accreditation on the basis of a misrepresentation made by the person, whether or not made knowingly, or

(b) the Board is satisfied that the person is not covered by the insurance required by Division 2 of Part 6, or

(c) the person is a mentally incapacitated person, or

(d) the person’s equivalent authorisation has been suspended or cancelled (otherwise than at the person’s request) under the law of another jurisdiction, or

(e) the person is an undischarged bankrupt, or

(f) the person has failed to comply with an order of the Board under section 31.’

6 It will be seen that the grounds in s 8(2) mainly refer to matters where considerations of urgency apply or circumstances exist which might be seen as voiding the accreditation. The provision is found in Part 2 of the Act, the Part dealing with applications for accreditation. Part 3 of the Act sets out the ordinary disciplinary jurisdiction of the Board arising from complaints about the practice of certifiers. Mr Barakat’s competence as a practitioner is not in issue in these proceedings. The Board’s decision goes to his integrity and character.

7 The right to apply to the Tribunal for review of Part 2 decisions is conferred by s 18, relevantly:

‘A person may apply to the Tribunal for a review of any of the following decisions of the Board under this Part [Part 2]: ...

(f) to suspend or cancel the person’s certificate of accreditation.’

8 The Board’s decision is a reviewable decision within the meaning of the Administrative Decisions Tribunal Act 1997 (ADT Act), and accordingly the person affected may apply for internal review under s 53. Ordinarily, finalisation of an internal review is required as a precondition to application to the Tribunal for external review: see ADT Act, s 55(1). Because of the effect of the Board’s order on his practice, the applicant lodged the day after the Board’s decision, 3 April 2008, his review application with the Tribunal. He applied for dispensation from the requirement to apply for internal review: see ADT Act, s 55(2); and for an urgent interim order staying the operation of the Board’s decision: see ADT Act, s 60.

9 The Tribunal granted both applications. The stay was for a period of six weeks subject to conditions, in essence confining him to work on hand. At the time the intended date of hearing was 21 May 2008. Subsequently the stay order was extended and a new hearing date set of 18 September 2008. The extension was granted to allow the Board to widen its case.

10 Section 63 of the ADT Act prescribes the way the Tribunal is to exercise its review jurisdiction:

‘(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.’

11 The Board was desirous of an extension in order to furnish the Tribunal with additional evidence that it saw as relevant to the matter. This aspect of the case was broadly described as the ‘Allianz claims’ conduct. The Board informed the Tribunal that, subject to summonsing various documents, it was considering submitting that Mr Barakat had engaged in deceptive conduct and other types of improper conduct in statements made to the home warranty insurer in support of a builder’s insurance application and related conduct.

12 That the Tribunal is engaged in a fresh exercise, and is not merely reviewing the administrator’s decision in the way that a court might in a judicial review, is well established. Section 63(1) of the ADT Act reinforces that position with its reference to the Tribunal making the correct and preferable decision ‘having regard to the material then before it’. Consequently, the Tribunal made further orders relating to the issuance of summonses and further directions to the parties as to evidence and submissions relating to the Allianz claims conduct.

13 In addition to the original material tendered by it under s 58 of the ADT Act, the Board relied at hearing on two affidavits from two senior managers with Allianz Australia Insurance Ltd (‘Allianz’), Mr Roderick Kempton and Ms Cathy Ball. The affidavits refer to a bundle of documents produced by the Board to the Tribunal pursuant to summons (bundle 10 in the material as marked by the Tribunal). Mr Kempton’s affidavit referred to segments from this material (bundle 11), as did Ms Ball’s affidavit (bundle 12). Mr Kempton and Ms Ball were not required for cross examination. The only oral evidence at the hearing was that of Mr Barakat.

14 The hearing was conducted before a two member panel, which included as is usual in this class of matter a non-judicial member experienced in issues relating to the work done by accredited certifiers who is a registered surveyor of experience and standing, Mr Peter Friedmann.

The Board’s Decision

15 The Board’s action against Mr Barakat’s accreditation stemmed from information it had obtained arising out of disciplinary action taken by the Commissioner for Fair Trading in respect of licences held under legislation administered by the Commissioner. The Commissioner had cancelled his supervisor certificate authorising him to do specialist work within the categories of electrical wiring, air conditioning and refrigeration. The Commissioner was of the opinion that he was not a fit and proper person to hold a supervisor certificate by reason of improper conduct. Further, the Commissioner disqualified Mr Barakat for a period of five years from holding such a certificate or various related certificates whether in person, as a member of a partnership or as an officer of a corporation.

16 The Tribunal delivered its decision on 30 April 2008, see Barakat v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 127, and substantially differed in its view:

‘The Commissioner’s decision to cancel Mr Barakat’s supervisor certificate and to disqualify him from holding such a certificate or various related certificates is set aside, and in substitution for that decision Mr Barakat is required to pay a penalty of $5,000 to the Commissioner within two months of the date of this decision.’

17 The hearing of Mr Barakat’s application to the Tribunal for review of that decision was imminent when the Board made the decision now under notice. The Tribunal was due to hear the application on 10 April 2008. Mr Barakat’s solicitors had submitted unsuccessfully to the Board that it defer action until the Tribunal had dealt with the Fair Trading decision. The material that had led the Commissioner to move against Mr Barakat’s qualified supervisor certificate is the same material that triggered the Board’s action. It is convenient to set out the summary of Mr Barakat’s conduct and the Commissioner’s action given in the Tribunal’s decision:

‘5 On 21 May 2001, Mr Barakat applied to the OFT [Office of Fair Trading] for a contractor licence to undertake residential building work in the category of ‘general building work’. In support of his application, he submitted a testamur for an Associate Diploma in Applied Science (Building), with a completion date of March 1993, purportedly issued by NSW TAFE. On 9 July 2001, relying on Mr Barakat’s application and supporting documents, including the testamur, the OFT issued him with a contractor licence authorising him to undertake residential building work in the category of general building work.

6 Investigations carried out by the OFT and, subsequently, by the Independent Commission Against Corruption (‘ICAC’), established that Mr Barakat’s testamur was issued fraudulently by a TAFE employee. Mr Barakat gave evidence before the ICAC in which he acknowledged that he had obtained the testamur fraudulently. He handed in his contractor licence at the ICAC hearing and has not since sought to renew it.

7 On 9 January 2007, the OFT gave notice to Mr Barakat inviting him to show cause why disciplinary action should not be taken against him on the ground that he is not a fit and proper person to hold a supervisor certificate. Counsel for Mr Barakat, Mr Conomos, responded by letter dated 21 February 2007. On 15 March 2007, Mr Barakat was interviewed by officers of the OFT. By letter dated 6 February 2008, a delegate of the Commissioner notified Mr Barakat that he had decided to cancel Mr Barakat’s supervisor certificate from the date of service of the decision, and also to disqualify Mr Barakat for a period of five years from holding such a certificate or various related certificates whether in person, as a member of a partnership or as an officer of a corporation.’

18 It was the OFT February 2008 decision that triggered the Board’s concern, and led to it using its powers under s 8. It issued its show cause notice on that date. Certificates are to be renewed annually. The Board referred to Mr Barakat’s then most recent renewal application dated 22 May 2007 and received 23 May 2007. The Board alleged that he had been granted renewal on the basis of a misrepresentation.

19 In its show cause notice and the reasons for its decision the Board refers also to s 7 of the Act. Section 7 sets out various grounds upon which the Board may refuse accreditation. Then and now, s 7 provides:

‘(1) The Board may refuse to issue or renew a certificate of accreditation: ...

(d) if the Board is not satisfied that the applicant is a fit and proper person.’

20 In its submissions to the Tribunal the Board also referred to another ground for refusal set out in (g):

‘(g) if the applicant has contravened a law (whether or not a New South Wales law, and whether or not the contravention is an offence) that relates to the functions or obligations of a person as an accredited certifier or the holder of an equivalent authorisation or involves fraud or dishonesty.’

21 As s 8(2) stood at the time of the Board’s decision that provision did not include a ‘not fit and proper’ ground for ordering suspension or cancellation. This explains, we surmise, the Board’s indirect approach to this issue in its decision of 2 April 2008. In its reasons, the Board grounded the cancellation on s 8(2)(a) (misrepresentation), but said that had it known the true position at the time of application for renewal it would have refused the application on the basis that Mr Barakat was not a ‘fit and proper person’ (s 7(1)(d)).

22 Section 8(2) has since been amended, and includes a paragraph (g) (amendment commenced 1 August 2008):

‘(g) the Board is of the opinion that the person is not a fit and proper person to hold a certificate of accreditation.’

23 At hearing the Board widened its case and relied on both grounds (a) (misrepresentation) and (g) (not fit and proper person). The applicant joined issue on that basis. The Board referred in detail to the circumstances of the misrepresentation under notice in the decision of 2 April 2008. It now referred in addition to further misrepresentations and other inappropriate conduct found in the Allianz claims material. This material in turn justified a finding that Mr Barakat was not a fit and proper person to hold accreditation as a certifier.

Declaration made in the 2007 Application for Renewal as an Accredited Certifier

24 Question 1 of Section 6 of the application is preceded by a warning and continues:

‘NB. Incorrect and misleading information may lead to cancellation of your accreditation. Further, under s 307B and 307C of the Crimes Act 1900, a person can be found guilty of an offence if the person gives false or misleading information or documents (maximum penalty for each offence is imprisonment for two years and/or a fine of $22,000).

6. SUITABILITY OF APPLICANT

Under section 7 of the Act, an application for renewal of accreditation can be refused on certain grounds, including if the applicant is not a fit and proper person.

Please answer the following questions to assist the Board to assess your application under s 7.

If you answer yes to any of the instructions, please provide details on a separate sheet(s) and attach to your application.

NB if it is an excluded offence you do not have to tick yes.

1. Have you ever contravened a law (whether or not in New South Wales and whether or not the contravention is an offence), that relates to the functions or obligations of a person as an accredited certifier or the holder of an equivalent authorisation or involves fraud or dishonesty? Yes/No.’

25 Mr Barakat answered ‘No’.

26 The Board referred in the show cause notice to the 2005 ICAC report of its investigation into schemes to fraudulently obtain building licences. It noted that the ICAC had recommended that the Director of Public Prosecutions consider prosecuting 36 named individuals including Mr Barakat. It set out extracts from the ICAC final report, p 118, p 121 [items 92 and 93] and p 122. It referred to ICAC’s findings.

27 The ICAC report referred to the evidence given by Mr Barakat. He was encouraged by a principal in the false transcripts racket, Mr Nehme, to use a false transcript to bolster his application to OFT for a general contractor builder licence. The degree to which the false transcript referred was one focused on building: Associate Diploma in Applied Science (Building) (TAFE). As we interpret the ICAC evidence, Mr Barakat understood that were he to rely on his actual qualifications which belonged essentially to a specialist sub-category of building work (electrical and air-conditioning) he may have faced delay while OFT deliberated, or even rejection. He paid $4000 to Nehme for his assistance, and then later a further $4000 for the false testamur and false transcript. He told ICAC that his son had also obtained a false transcript through Nehme. Findings 92 and 93 reflect this evidence. ICAC named 11 persons including Mr Barakat, as having submitted documentation they knew to be false to OFT in support of building and building trade licence applications.

28 Mr Barakat was found:

- to have engaged in corrupt conduct within the meaning of the ICAC Act.

29 ICAC expressed the considered opinion that the conduct could amount to offences under the Crimes Act in the way indicated in the Board’s show cause notice, i.e.

- Making false statements to OFT in connection with his licence application contrary to s 307A of the Crimes Act 1900.

- Aiding, making and/or using false documents contrary to ss 300(1) and 300(2) of the Crimes Act 1900.

- Aiding, making and/or obtaining a licence by deception contrary to s 178BA of the Crimes Act 1900.

30 In its reasons for decision the Board noted that Mr Barakat had not in any renewal application since the conduct occurred referred to his involvement in the fraudulent scheme. It noted further that the ICAC report was quite recent at the time of Mr Barakat’s renewal application. In its view the ICAC report had identified in a specific way the offences in which Mr Barakat had been involved. It asserted that he should have disclosed all four matters as contraventions. It rejected Mr Barakat’s submission that the question might be understood only to refer to matters that had occurred in the immediate preceding 12 months’ period of accreditation.

31 At hearing, the Board pressed its view that Mr Barakat’s answer was, in the circumstances referred to, a misrepresentation. Further, it asserted that as a result of the conduct, findings and recommendations set out in the ICAC Report, Mr Barakat was not at that time, and is not now, a fit and proper person to hold a certificate of accreditation.

Applicant’s Case

32 Mr Barakat’s central submission to the Tribunal was to the same effect as the following submissions put to the Board in a letter dated 21 February 2008:

‘If the Board intends to rely on a single incident in an otherwise unblemished life and career in the building industry to establish that he is not a fit and proper person to hold a Certificate of Accreditation, that incident needs to be put in perspective.

Mr Barakat exhibited complete candour and remorse in relation to the underlying allegations when he was called upon to give evidence before the "Ambrosia" hearing of the Independent Commission Against Corruption on 20 April 2005. ...

During the licenced period Mr Barakat did not use the Contractor licence for the performance of any building work nor to advertise his services.’

The Allianz Material

33 The Board put the Allianz material forward as the main plank of its reply to the applicant’s case. It commenced by referring to a passage from the evidence of Mr Barakat before the ICAC and two of his answers (p 1251, ll 24-28). Mr Barakat also referred to this passage and referred to a third answer. We set out below the passage incorporating the three answers:

‘Counsel: And since you received your licence some time in 2001, have you used it?

Answer: To build? No.

Counsel: Have you used it in any correspondence with anyone?

Answer: Seen one correspondence only, and obtained insurance for one building.

Counsel: The licence enabled you to obtain insurance and then for one building.

Answer: The building was completed. Was completed and finished and I got insurance for it. I never actually entered into any new building project.’

34 In 2000, Allianz became an approved insurer under the home owner warranty insurance. Under the Home Building Act 1989 all residential building work is required to be insured through an approved insurer. Allianz received a number of claims in relation to work done on a building at 108 Penshurst Street, Willoughby. The building comprised a ground floor with commercial units and seven two storey residential units above.

35 This project had a complex insurance history. It was built between 1999 and 2001 without insurance cover. The original builder ran into financial difficulties. A building consultant acting on behalf of the owner approached Mr Barakat to take over the job. He applied for insurance for the project. At the time Council approvals could occur without the Council being assured as to the existence of the mandatory insurance cover.

36 Dexta Corporation Ltd, as managing agent of this class of insurance for Allianz, issued a retrospective policy covering residential building work to 30 June 2001 showing Mr Barakat as the licensed builder. Subsequently it refused to issue a further policy for the next period after forming the opinion that Mr Barakat had misled it in several respects in relation to his previous application. It reported his conduct to the Department of Fair Trading (predecessor to the OFT).

37 There were a number of defects claims from owners of the individual units and the body corporate in relation to the work. Mr Kempton noted that not all claims were approved. His evidence then refers to seven claims. He gives several examples where Mr Barakat failed to respond at all or inadequately to requests for information and to the undertaking of rectification works. Mr Kempton’s affidavit annexes the documents from the summonsed material that evidences this conduct. Mr Kempton notes that the body corporate claims alone resulted in a payment of $266,874. Overall Allianz paid out a total of $328,916 in respect of the development, and that none of this amount has been recovered by the insurer from Mr Barakat or any other person at this stage.

38 Ms Ball worked in the relevant period for Dexta Corporation Ltd. She said that Dexta’s practice was only to issue Home Owners Warranty insurance after assessment of the builder either on a job specific or annual basis. It only issued insurance to the approved builder as shown on the insurance certificate. She said that in some limited and exceptional circumstances it had issued policies after the work had been completed. Her affidavit had annexed to it a large bundle of documents described as ‘The Allianz Underwriting Exhibit’.

39 These documents set out the history of Mr Barakat’s applications for builder insurance in the period July to December 2001. Mr Grey made numerous criticisms of Mr Barakat’s conduct in that respect.

40 The applications followed immediately after Mr Barakat had been granted the contractor licence authorising him to undertake residential building work in the category of general building work (9 July 2001), where he had used the false testamur and transcript.

41 Mr Grey referred to his first application of 13 July 2001, via Mr Carr of ICA Insurances, for annual or job specific insurance. He noted that the application contained a number of deceptive statements – as to, for example, his holding of a ‘building diploma’, the extent of his prior residential building ‘project management’ experience and the total value of the main project for which he said he had been responsible in the last 12 months (Burwood, giving an estimate of $9m). He noted that in the accompanying statement of assets and liabilities he had listed his assets and liabilities, and shown a net position as his own. He had answered ‘yes’ to the question as to whether the assets shown were ‘owned solely by the person named’. The true position Mr Grey said was that the assets were held with his spouse and a family company. Later documents support that assertion. The application gave a forward estimate of work to be done of $1m.

42 In Mr Grey’s submission, this application in seeking annual cover, and referring to projected work, and past activity on a large scale, was not consistent with an intention, at least at the time, to only get insurance for one job.

43 Dexta on behalf of Allianz gave Mr Barakat a quote for an annual policy. The quote included a requirement that certain further information be provided before a policy would issue including details of current insurer and expiry date of policy. Mr Barakat could not supply a current policy. Later the cover is declined on the basis that the insurance was required for ‘project management purposes’ and that is not permissible under the scheme. The policy must cover the ultimate responsibility of the builder contractor.

44 On 5 October 2001 Mr Barakat pressed again the original application for insurance, via a new broker, Bass Brokers, this time job specific insurance in connection with two jobs.

45 Separately he lodged a second application on 12 October 2001 via Bass Brokers. Mr Grey pointed to his answers of ‘no’ to several questions relating to his history. He submitted that Mr Barakat had failed in his duty to disclose material matters in relation to questions going to whether he had had cover declined, and more broadly as to his conduct as it concerned the obtaining of a builder’s licence and his claim that he had two jobs on foot.

46 A file note records that Mr Barakat was seeking on this occasion insurance cover for the Willoughby job, and the unusual circumstance that it was a job that had just been completed.

47 The recommendation was that a full assessment be undertaken. Two reports were already in hand, one from Mr Glen Walters, Building Consultant (‘Accredited Building Inspections’) finalised 11 October 2001, the other from Far West Consulting Engineers dated October 2001. Mr Walters recommended issuance of insurance. He referred to two inspections between which rectification of defects had taken place. His report noted that the work had commenced on 2 May 1999, and was completed on 28 June 2001. Based on later communications from the insurer, the likelihood is that the insurer was not aware of Mr Walters’ relationship to the owner, or his relationship to Mr Barakat in relation to obtaining belated insurance.

48 Far West Consulting Engineers is one of the businesses conducted by BHB Pty Ltd of which Mr Barakat and his wife are the owners and co-directors. The report expressed the opinion that the building was structurally sound and safe to occupy and is capable of meeting the ‘full compliance’ of the deemed to satisfy provisions of the Building Code of Australia. Mr Grey pointed to the conflict of interest involved in the applicant for contractor insurance, Mr Barakat, being involved, via the family company, in giving a professional assessment supporting the grant of insurance, and with there being no disclosure of the conflict.

49 A later file note gives an explanation as to how Mr Barakat became involved with this project as the contractor. It states that the original builder became insolvent and Mr Barakat took over the job when the project was completed. The Council, it states, had not ensured that insurance was in place, the development had been approved, work had been completed, and solicitors for purchasers were advising their clients not to settle in the absence of insurance. The file note alluded to the political problem that would arise for the Government if no cover issued. This kind of situation, to the knowledge of the Tribunal, was regrettably not uncommon at this point in the history of the home owners warranty scheme (builders not having insurance in place but Councils proceeding to deal with the development requirements in the usual way).

50 Further information was submitted by Mr Barakat through Bass Brokers on 26 October 2002. Mr Grey noted that this application no longer referred to Mr Barakat’s relationship with previous jobs as that of ‘project manager’. The cover page from the broker stated that he had not done of lot of building lately under his own licence. Mr Grey said that this statement was inconsistent with evidence Mr Barakat had given to the ICAC inquiry about his level of activity during the 2000-2001 period.

51 On 30 October retrospective cover issued. Dexta then proceeded to deal with an application for insurance for the current period. In November there were a number of exchanges between his broker and Dexta. The responsible officer at Dexta, Mr de Silva, declined further cover.

52 Mr de Silva advised the broker that his investigations confirmed that Mr Barakat had only been granted a licence on 9 July 2001, and that he was therefore unlicensed at the time the work was undertaken. He stated that at no time did he disclose to Dexta that he was not properly licensed when the work was done. He stated that it also appeared that Mr Barakat had acted as project manager for jobs without being licensed. He noted that his earlier applications had not clearly stated the true state of ownership of the assets set out in the financial statement. In later correspondence with the Department of Fair Trading, Dexta states that it was unaware when Mr Barakat made the original application that he was only recently licensed and was not the builder for the entire duration of the Willoughby project.

Applicant’s Response

53 In his affidavit (8 September 2008) Mr Barakat replies to this analysis of his conduct by stating that he was induced by Mr Glen Walters to take on the status of builder for the purpose of applying for the warranty insurance, because otherwise the owner would not be able to sell the building. He said he enquired as to who had built the building, and was told that the builder had gone bankrupt. He said that he would proceed subject to various reports being obtained, and that he would look to the owner for an indemnity for any liabilities he might incur. Mr Barakat subsequently obtained an indemnity. The hand-written agreement dated 12 October 2001 between the owner (Jim Grozdanovski) and Mr Barakat is in evidence. One of Dexta’s other criticisms, supported by Mr Grey for the Board, was that it was a material matter for it to know that an applicant for insurance held an indemnity from another source. As to the subsequent claims, Mr Barakat states that he referred them to the owner in accordance with the indemnity. He said that no claims had been personally made against him, by which we understand in relation to the assessment undertaken by Far West. He referred to his evidence at ICAC where he stated that he had only the licence in respect of this one building, and had never actually entered into any new building project.

54 In cross examination Mr Grey asked Mr Barakat about the testimonials presented to the earlier Tribunal hearing, and the absence of any reference in them to the ICAC inquiry and findings. His response was that he was generally seen as honest, and he did not wish to have this event known to people.

Submissions for Applicant

55 Mr Conomos depicted his client as having got himself involved in obtaining the false qualifications in ‘lunatic’ activity in 2001. He commended the view formed by the Tribunal in the previous matter. He had put the episode behind him, and was otherwise a person who could be trusted to carry out his duties in a professional and appropriate manner. There is no doubt, he said, that his client had been dishonest in a grave way in doing what he did in 2001. He said that the only use he made of the bogus licence was in connection with the Willoughby job. He depicted his conduct on that occasion as having been coloured by a desire to accommodate a colleague who had sought his assistance on behalf of an owner in financial difficulty. He noted also that Willoughby Council had been the principal certifying authority for the Willoughby job, and it had been satisfied as to its adequacy. He noted that Mr Barakat had admitted his guilt in respect of the obtaining and use of the false transcript.

56 He did not address in any detail the Allianz material, but, as we understood the submissions, saw that conduct as belonging to a period well in the past, and largely to be explained by the circumstances in which it occurred.

Assessment

57 As noted earlier, this is not a case about the general competence of Mr Barakat in the various branches of the building industry in which he and his company undertake professional work or about his technical competence in the professional tasks of an accredited certifier.

58 This case squarely raises issues of integrity of conduct. While the events all belong to the one year, 2001, both sets of events (the conspiracy to obtain forged documents and present them to a licensing body, and the dealings with the home warranty insurer over the application for insurance in respect of the Willoughby project) involve systematic activity.

59 The licence under notice in the other proceedings was that of qualified building supervisor. While this is an important licence, it is, we think, a licence of lesser public significance than that of an accredited certifier. What is required by way of fitness and character ‘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’: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 per Toohey and Gaudron JJ at [36].

60 Accredited certifiers hold a position of public trust requiring independent judgement to be exercised about such critical matters as whether a developer’s building plans are consistent with the development consent, and whether the building as constructed has remained consistent. He or she is a judge as to critical stages of the building works. They must have the ability to bring an informed and detailed technical understanding to their assessment task. They must be sufficiently robust to ensure that a developer or builder fall in line, and make changes where non-compliance is detected. They must be prepared to refuse a certificate if appropriate. When they have multi-faceted building services businesses (as Mr Barakat has), there may be a real tension between their role as an independent umpire and their desire to retain the applicant for the certificate as a client in other parts of the business.

61 The assessment that the Tribunal made in the other case is not, we think, transferable readily to the present situation. While a qualified supervisor also has to ensure compliance with building standards in the work done, the role is ultimately one that falls within the ordinary framework of a building contract and is subordinate to the building contractor. It is not, in the way that a certifier’s office is, an office of public trust.

62 The Tribunal in the other case was inclined to a less harsh view of Mr Barakat than the Commissioner for Fair Trading having regard to Mr Barakat’s otherwise unblemished history as a qualified supervisor (he had held that status for 25 years), the quality and scale of his business (notably there had not been one complaint to the OFT about his work), the strength of the testimonials tendered, and the Tribunal’s judgement of Mr Barakat’s evidence. The Tribunal was satisfied that he was contrite, had learnt his lesson, and considered that while the conduct in which he engaged had been grave, it had been isolated.

63 In this case, as we have noted, many of Mr Grey’s submissions drew into issue aspects of that case, in particular referring to the limited value of the testimonial evidence. Further, the Tribunal did not have before it the Allianz material. That may well have led it to a different view on the question of whether Mr Barakat’s behaviour in 2001 could be reasonably characterised as an isolated incident.

Ground (a) (Misrepresentation)

64 There is room for legitimate debate about what ought to be regarded for the purposes of taking disciplinary action especially the severe action of immediate suspension or cancellation as misleading non-disclosure of a ‘contravention’ – of a ‘law’ – ‘involving fraud or dishonesty’, where no objective finding to that effect has been made by a court or other tribunal.

65 We see regularly expressed in public and media commentary, often by people of great status in the community (Ministers of the Crown for example), the view that a person the subject of a serious allegation is to be treated as innocent until proven guilty. Similarly, an applicant for renewal of licence may well take the view that no matter how strong the findings are of an administrative body undertaking a preliminary inquiry (such as ICAC as here, or a Royal Commission or a Coroner) that does not mean that if charges are preferred based on the finding that he or she will be found to have contravened the law. An ordinary applicant may think, in line with the views mentioned, that they are innocent until found guilty.

66 When Mr Barakat filled in this form, the recommendation that he be charged had subsisted for eighteen months. At the time of our hearing, still there was no action or other determination. He may well have held the view that he is not the person to judge whether conduct he is engaged in amounts to a contravention and that is for others to determine.

67 On the other hand, in this instance it is plain that Mr Barakat admitted the wrongness of his conduct to ICAC. He gave an account of his involvement in the forged degrees scheme. He placed some of the blame on one of the principals in the scheme, Mr Nehme, not unlike his explanation for getting involved in the Willoughby insurance application (referring to Mr Walters, who, we note, has not had the opportunity to give his version of the matter).

68 The renewal process under consideration in this case goes to the holding of an important public office. There would be understandable public concern if the occupant of an important public office had engaged in contravention of a law bearing on the performance of the office, or, as in this case, in the contravention of a law involving fraud or dishonesty.

69 We consider that caution needs to be shown in taking action under ground (a) of s 8 in relation to alleged failures to disclose alleged contraventions in the law where there has been no court finding to that effect. However, we do think that an accredited certifier should be expected to disclose in answer to a question of the kind that appeared on the renewal form a finding of contravention of law by an administrative inquiry that has used a judicial model.

70 The question went, in our view, to a relevant matter, in asking whether the applicant has been involved in a contravention of the law involving fraud or dishonesty. This is plainly relevant to issues of integrity and character.

71 In this instance there was an external finding of contravention involving fraud and dishonesty, the corrupt conduct finding. It was submitted for Mr Barakat that a finding of corrupt conduct under the ICAC legislation is merely a finding on a definitional matter, and is not prescriptive or punitive. Accordingly such a finding should not be construed as a finding of contravention of the law. In our view, the question was clear in one respect – that it ranged beyond the criminal law to include contraventions of laws generally. This is understandable. Practitioners in the building industry are subject to a range of laws. We interpret the question not to extend to mere matters of private obligation (contracts, for example) but to be intended to cover misconduct in relation to laws of a public character (for example, company laws, fair trading laws). In this instance Mr Barakat was the applicant for renewal of a public office. In our view, a finding of corrupt conduct by the ICAC involves a determination of breach of a public standard set by the law, and should be regarded as a finding of contravention.

72 There is an issue as to how far back into the past an applicant should be expected to go in answering a question of this type. The question on the form itself acknowledges that excluded offences need not be revealed. We did not have evidence on this matter, but we take that to be a reference to the protection afforded by spent convictions law. That law does not apply to the kind of adverse administrative findings that have been brought under notice by this case. In our view, there should be some similar policy in relation to old findings of contravention.

73 This issue does not arise here. While the conduct was some years in the past, the finding was a recent finding. In line with our view, it should have been disclosed in the 2006 application for renewal.

74 In the circumstances of this case, we are satisfied that ground (a) is made out, and that Mr Barakat engaged in misrepresentation, at least by not referring to the ICAC finding of corrupt conduct.

75 We do think, however, that there are extenuating factors. The scope and reach of the question asked was, we think, unclear. When is conduct to be regarded as a ‘contravention of the law’ when that has not been so determined by a competent body such as a court or tribunal. It is an area where education and guidance from the accreditation body would be of assistance. There was no evidence in this case to suggest that any of the accreditation bodies had done any work to explain the reach of the question. It is asking, we think, too much of human nature for applicants and it may be oppressive, to require them to provide a purely subjective response to such a question.

76 We would not have been inclined to have endorsed the Board’s order had the misrepresentation involved in this answer been the only relevant material. However the relevant evidence has now widened, as has the law in relation to the grounds for suspension and cancellation using the s 8 power.

Ground (g) Not Fit and Proper Person to be Accredited

77 This is now the central issue.

78 ‘Fitness’ is always to be determined by reference to the ‘present’ fitness of the person. Misconduct that lies well in the past may be offset by personal acknowledgement of the misconduct (contrition, remorse, amendment of behaviour so as to avoid recurrence) and good conduct in the intervening period. Where the conduct under notice involves matters of competence or diligence, efforts at rehabilitation which address those issues (by additional training, mentoring or acceptance of conditions limited to the area of practice, or where the source is personal catastrophe, involvement in therapeutic programs) may be sufficient. See generally McBride v Walton (NSWCA, unreported, 15 July 1994 per Kirby P at [21]-[26] and per Powell JA at [59]-[73]; also, Burton v Anderson (NSWCA, unreported, 28 October 1994); and recently, Stojanovic v Commissioner for Fair Trading, New South Wales Office of Fair Trading (GD) [2008] NSWADTAP 84.

79 This case raises a question of integrity. Mr Barakat was an accredited certifier at the time of the events in 2001. His age at that time was 48 years (the material is inconsistent as to whether his birth year was 1953 or 1955, the previous Tribunal gave 1953), he had been a practising professional for 18 years including 13 years as a public servant. The misconduct occurred in connection with building licensing. As an accredited certifier the public would expect that he not behave in a corrupt manner in relation to the operation of the building industry, especially in circumstances where he was regularly called to judge the work of builders in his fields of specialty as an accredited certifier.

80 The additional material brought forward by Mr Grey in our view was telling. It showed profound lack of judgement on the part of Mr Barakat. On the heels of obtaining his licence corruptly, he allowed himself to be used in a scheme to overcome a fundamental omission in circumstances that led him to engage in a series of deceptions and non-disclosures to the home warranty insurer.

81 We agree with Mr Grey that there was a pattern of behaviour extending over several months that was inconsistent with the standards that would be expected of a person holding an office of public trust in relation to the building and development process.

82 We are not satisfied on the evidence that he has a real appreciation of the wrongness of his conduct. While he stated in his evidence to the Tribunal that he fully understood the gravity of his actions, would not re-offend and could be trusted, we are not satisfied.

83 We do not put any great weight on the answer to the ICAC inquiry. Mr Barakat’s answer could be seen as accurate in terms of the question asked.

84 However, we do consider that Mr Barakat’s initial application for insurance was designed to be for residential building work generally. His submissions to the previous Tribunal hearing, to the Board and to this Tribunal have all placed great store by the fact that he only ever did one job under the licence, the Willoughby job. In our view, it is stretching credulity to suggest that this was all the licence was intended to accommodate. Moreover, as the Allianz material graphically demonstrates, Mr Barakat allowed himself to be involved in another dubious scheme, one riven with conflict of interest and non-disclosure. Mr Barakat’s report, under the masthead Far West Consulting, on the building was not at arms length from his insurance application. The report of Mr Walters went forward in circumstances where Mr Barakat was aware that Mr Walters was an agent of the builder in approaching Mr Barakat, so that report was not an arms length report either.

85 There is nothing in the material before us to suggest that Mr Barakat now grasps the importance of avoidance of conflicts of interest of this type.

86 Also the Allianz material puts into serious doubt, we consider, the submission that his conduct in connection with the forged degrees racket was a one-off, isolated aberration.

87 The object of disciplinary orders is public protection. The key concept in the Act as to the standard of professionalism expected of an accredited certifier is found in s 19, and the definition of ‘unsatisfactory professional conduct’. The Act imposes its disciplinary regime primarily on:

‘conduct occurring in connection with the exercise of the accredited certifier’s functions as a certifying authority that falls short of the standard of competence, diligence and integrity that a member of the public is entitled to expect of a reasonably competent accredited certifier’

88 In this instance we do not think that a fair-minded member of the public with an understanding of the role of an accredited certifier would conclude that Mr Barakat is a fit and proper person to remain an accredited certifier. The object of public protection would be best served by not allowing Mr Barakat to continue as an accredited certifier.

89 In our view, his failures of integrity were very serious ones. They occurred as a mature man who had a long career in the public service prior and was now in practice on his own behalf. He had substantial educational qualifications. The conduct he engaged in during 2001 is not explained, for example as behaviours with some immediate personal context of catastrophe (marital breakdown, mental illness, drug addiction) as sometimes occurs in cases of this type. Mr Barakat relies mainly on the passage of time and lack of re-offence. His submissions also state, and they were not contested, that he did not renew his contractor licence in 2004 and that he has subsequently co-operated with the authorities.

90 The submissions refer to the fact that he has held his certificate continuously for nine years. We note that the conduct under notice occurred while he held the certificate. Had this conduct been known at or near the time to the then accreditation body, we expect that immediate action would have been taken against his accreditation. That would have had meant that his intervening history would have fallen under notice as part of a re-application for accreditation. In our view, the present circumstances involving lately-revealed misconduct of great seriousness are ones where it is up to Mr Barakat to satisfy the administrative body, and the Tribunal in turn, that he should be trusted to continue as a certifier. See further the Appeal Panel’s discussion of situations of this kind in Stojanovic, cited earlier, at [45] and following. The Appeal Panel there referred to various statements from eminent judges, among which is the following from Ex parte Tziniolis; Re The Medical Practitioners’ Act (1966) 67 SR (NSW) 448 at 461 per Walsh JA:

‘Reformations of character and of behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man.’

91 Another was from Anderson J in Good v. The Medical Board of Western Australia (SCWA, 6 December 1994) at (p.17):

‘Courts have said often enough that genuine remorse and contrition, true insight and understanding of earlier turpitudes [are prerequisites] to the regaining of good character.’

92 We have serious doubt about his level of understanding of the wrongness of his actions. In his affidavit in these proceedings he sets out a didactic account of the key steps in the obtaining of the insurance for Willoughby. He does not explain his lack of responsiveness to Allianz in relation to inquiries made of him. He simply states, ‘In relation to any subsequent claims made against 108 Penshurst Street, Willoughby, I referred them to Jim Grozdanovski in accordance with his indemnity to me.’ The answer shows no recognition of the duty of an insured party to respond appropriately to relevant communications from the insurer.

93 The indemnity matter was not at the centre of this case, but there must be grave doubts, we think, as to whether it is appropriate or ethical for a person to procure a background indemnity of this kind in relation to home warranty insurance, especially in circumstances where it is known that the giver of the indemnity was in financial difficulty if not insolvent. Mr Barakat also repeats a statement that he has made elsewhere in the material – ‘No claims have been made personally against me in relation to 108 Penshurst Street, Willoughby’. We take that he is here differentiating between his role as an expert appraiser of the quality of the work he was called upon to review (via Far West Consulting) and his position as the insured builder.

94 At the stay hearing in the present matter he listed seven jobs where he was committed as the accredited certifier. At hearing he said that six of the seven had been discharged, and in relation to the remaining job only the final occupation certificate stage remained.
95 In our view, the Board’s order is to be affirmed. The order should take effect immediately. If the one job mentioned remains outstanding, Mr Barakat is to arrange for it to be transferred.