28 April 2026
21 min read
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Licensing has been a focus topic in our team lately and for good reason. If you’re a residential builder or a specialist trade in NSW, then no ticket, no play.
While the facts of the decision in Leto v Secretary Department of Customer Service [2026] NSWCATOD 26 (Leto v Secretary) are obviously very specific, an insolvency in an applicant’s trading history is frequently a barrier to licensing and is frequently an inducement to do whatever is necessary to avoid insolvency, so as to retain a licence or the future prospect of one.
This decision can be seen as instructive on a number of levels, firstly on the statutory construction point around whether a condition can be relevant to exercising the discretion and as a temperature check on the Tribunal’s views on the discretionary factors of:
The decision concerned an application for administrative review of a decision to refuse a contractor licence. The applicant had been a director of a (licensed) company placed in administration in 2020. Accordingly, the applicant had been found to not satisfy the mandatory requirements in section 33B(1)(a)(xvi) of the Home Building Act 1989 (NSW) (HBA) to be granted a contractor licence.
Section 33B(1)(a) lists a number of factors which must cause the Secretary to not issue a licence. Among them is if the applicant is a director (or person concerned in the management of) of a company which became insolvent within 10 years before the application.
A discretion in section 33C(3) operates to soften the impact of that (and two other insolvency related) prohibition, provided the Secretary is satisfied of (all) three key matters, discussed under the headings below.
The main issue in contention was whether the discretionary factors in section 33C(3) were made out and whether a condition under section 33C(4) could be imposed, which would contribute to satisfying section 33C(3)(a).
In terms of the facts relevant to the section 33C(3) discretion, the applicant sought a contractor licence only to assist him in demonstrating experience and standing for the purpose of conducting building inspection services (for which there is currently no licence in NSW). The condition proposed under section 33C(4) was not to enter into contracts which exceed $20,000, which would ensure there was no risk to the public. Alternatively, the applicant contended there was power under section 36 to impose such a condition.
The respondent’s position was that a condition under section 33C(4) may only be considered after section 33C(3) is satisfied and not as an ingredient in satisfying section 33C(3). In relation to section 36, although the respondent agreed that it is a broad power to impose conditions, where there are two sources of power, the respondent’s position was that it would not have been intended to give rise to inconsistent outcomes.
The respondent pointed to the 124 unsecured creditors of the former company, estimated at more than $1.5m and suggested that there was an 'evident risk' that any future building contracts that the applicant entered into, if licensed, could not be completed. The former company also had an adverse history of 12 complaints and four home warranty insurance claims.
The Tribunal found that it needed to be satisfied that there is no evident risk to the public that the applicant will be unable to complete contracts entered into in the future to do residential building work or specialist work. That is, regardless of the stated intention not to do that work, in favour of building inspection work. The lack of assets and financial capacity to carry out work meant the applicant had not demonstrated that he had the financial means to undertake work of that kind, including to purchase the necessary tools and equipment.
In relation to the former company’s debts, the Tribunal considered the amount (or even the lesser amount contended for the by the applicant) to be significant. The compliance history, considered alongside the current financial situation, meant that the Tribunal could not be satisfied that there was no evident risk of future non-completion.
In relation to the interpretation arguments, the Tribunal found:
For completeness, the Tribunal considered whether section 33 C(3)(b) and (c) had been met.
In relation to whether the applicant had taken all reasonable steps to avoid the liquidation, the Tribunal noted that the point of commencement of the enquiry was when the applicant was 'faced with the possibility' of insolvency or was 'aware' or 'should have been aware' of that possibility.
The Tribunal found the applicant’s evidence of the facts and circumstances that led to the liquidation to be inconsistent and unreliable. Further, there was no affidavit evidence of the change in the applicant’s business model and no documents to support the alleged attempts to enter into payment arrangements with subcontractors, or of cash injections into the business from the applicant’s wife. In relation to the unanswered statutory demand, which was the direct trigger for the winding up order, the applicant could not recall or explain that he took any steps in relation to it.
Accordingly, the Tribunal found that section 33 C(3)(b) had not been met.
The applicant’s evidence was that he had implemented several risk mitigation strategies in his new business to avoid any future risk of insolvency. These included regular financial management reviews with his accountant, use of MYOB with real-time bank feed monitoring to track cash flow and budgeting, revenue diversification through a range of building inspection services, lead generation through a franchise and contingency planning to respond promptly in the event of financial stress or economic downturn.
In relation to whether the applicant put in place sufficient risk mitigation measures, the Tribunal noted that the measures catered for a building inspection service and were not sufficient for carrying out residential building work, which was the relevant assessment to make.
The Tribunal noted that aside from the car and franchise of the new business, the applicant had no assets and had not demonstrated that he had the financial means to undertake residential building work, including for the purchase of necessary tools and equipment. Accordingly, the Tribunal found that the applicant had not demonstrated that he had put in place sufficient risk mitigation measures to avoid a future liquidation.
The existence of a discretion to assist applicants with an insolvency in their background should not be considered a free pass to a licence. The elements required for the Secretary to be satisfied must be robustly established with supporting evidence and, in particular, would require exceptional circumstances to be shown in relation to reasonable steps to avoid the liquidation.
Author: Christine Jones
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CIVIL PROCEDURE – Summary judgment – Where Second Defendant will not file any evidence in relation to Plaintiff’s Claim – Where Second Defendant has no defence to claim
COSTS – Gross sum costs order – Where Second Defendant will not file any evidence in relation to Plaintiff’s Claim
Civil Procedure Act 2005 (NSW); Design and Building Practitioners Act 2020 (NSW); Home Building Act 1989 (NSW); Uniform Civil Procedure Rules 2005 (NSW)
Frasers Central Park Land No 1 Pty Ltd v Frasers Central Park Equity No 1 Pty Ltd [2026] NSWSC 364
SEPARATE QUESTIONS — parent company guarantees builder’s performance of construction contract — builder completes construction in stages from 2014 to 2015 — builder and developer sued in eight sets of proceedings for $180 million damages in respect of building defects — these proceedings commenced to enforce guarantee in the event that the builder is found to be liable for building defects in those eight proceedings — parent seeks separate question akin to demurrer to determine whether guarantee is enforceable given limitation arguments — difference between demurrer and separate questions — principles at [4]-[12] — separate question likely to be hotly contested and judgment appealed — these proceedings may not need to be determined at all depending on outcome of eight building defects proceedings — questions of mixed fact and law — lay evidence and discovery likely — limitation defences should only be decided in advance of trial in the clearest of cases, of which this was not one — case management considerations, where separate question would divert time and resources from eight building defect proceedings — application dismissed.
Environmental Planning and Assessment Act 1979 (NSW), s 6.20; Home Building Act 1989 (NSW), s 18E; Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW); Uniform Civil Procedure Rules 2005 (NSW), rr 28.1, 28.2, 28.3
Howse v Caam Group Pty Ltd [2026] NSWDC 92
BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — assessment of damages following default judgment
RESTITUTION — Mistake — Restitution of money paid – assessment of amount payable
Home Building Act 1989 (NSW); Uniform Civil Procedure Rules 2005 (NSW), r 12.7
Di Lullo v JG King Pty Ltd (No 2) [2026] NSWDC 82
COSTS — application for costs when the question of liability has been tried and the question of quantum is pending — costs of third party cross-defendants where cross-claim unsuccessful
Design and Building Practitioners Act 2020 (NSW), s 37; Home Building Act 1989 (NSW), s 18B(1); Uniform Civil Procedure Rules 2005 (NSW), rr 20.26, 42.1, 42.15A(2)(b)(i)
JE Flaherty and DC McMullen t/as DM Construct v King [2026] NSWCATAP 106
BUILDING AND CONSTRUCTION – where contract for residential building work not in writing pursuant to Home Building Act 1989 (NSW) – where Tribunal upheld builders claim in quantum meruit – where Tribunal upheld homeowners cross-application for damages for defective building work – whether decision of Tribunal on cross-application based on material errors of fact – whether Tribunal failed to adequately expose the process of reasoning leading to its decision – whether Appeal Panel should re-exercise original jurisdiction or remit proceedings for re-hearing by Tribunal – whether ambit of re-hearing should be limited to determination of builders liability for alleged defective work
Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW)
Southern Pacific Builders Pty Limited v Kelly (No 2) [2026] NSWCATAP 124
COSTS - Party/Party — Appeals – whether amount in dispute on appeal exceeds $30,000 – special circumstances required – no special circumstances established.
Civil and Administrative Tribunal Rules 2014 (NSW); Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW)
Mashat v Build Property Pty Ltd (No3) [2026] NSWCATCD 30
COSTS — Party/Party — General rule that costs follow the event — Application of the rule and discretion – mixed success on multiple issues.
Civil and Administrative Tribunal Act 2013 (NSW); Civil and Administrative Tribunal Rules 2014 (NSW); Home Building Act 1989 (NSW)
Nero v Aztec Building Group Pty Ltd [2026] NSWCATCD 29
BUILDING and CONSTRUCTION – Repudiation of contract – Inability to perform the contract – Wrongful repudiation amounts to a repudiation
Home Building Act 1989
Nath v MGM Construction and Development Pty Limited [2026] NSWCATCD 26
BUILDING CLAIM – breach of contract – compensation re cost of completing works – compensation re loss of rent
Civil and Administrative Tribunal Act, 2013 (NSW); Home Building Act, 1989 (NSW)
Tran v Secretary, Department of Customer Service [2026] NSWCATOD 54
ADMINISTRATIVE LAW – refusal of contractor licence – whether fit and proper person – criminal convictions – insufficient evidence of facts behind the criminal convictions – insufficient evidence of the applicant’s rehabilitation — insufficient time has passed in order to adequately determine whether the applicant has been rehabilitated
Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013; Home Building Act 1989 (NSW)
COSTS — indemnity costs orders sought by reason of rejection of Calderbank offer — whether offer contained genuine compromise — whether dismissing proceedings with no order as to costs constitutes a genuine compromise — whether failure to accept was reasonable — indemnity costs order granted
COSTS — whether protective/defensive cross-claim should be awarded costs — costs order granted
COSTS — whether a defendant’s recoverable costs should be reduced on the basis that their interests were aligned with co-defendants — whether coordinated defences mean unreasonable duplicative work was undertaken
Civil Procedure Act 2005 (NSW); Design and Building Practitioners Act 2020 (NSW); Home Building Act 1989 (NSW); Uniform Civil Procedure Rules 2005
JE Flaherty and DC McMullen t/as DM Construct v King [2026] NSWCATAP 106
BUILDING AND CONSTRUCTION – where contract for residential building work not in writing pursuant to Home Building Act 1989 (NSW) – where Tribunal upheld builders claim in quantum meruit – where Tribunal upheld homeowners cross-application for damages for defective building work – whether decision of Tribunal on cross-application based on material errors of fact – whether Tribunal failed to adequately expose the process of reasoning leading to its decision – whether Appeal Panel should re-exercise original jurisdiction or remit proceedings for re-hearing by Tribunal – whether ambit of re-hearing should be limited to determination of builders liability for alleged defective work
Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW)
Ferretti v The Owners – Strata Plan No 8847 [2026] NSWCATCD 25
LAND LAW — Strata title — Owners corporation — building work arranged to be done by owners corporation on common property and lot property — agency in respect of work on lot property
BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Statutory warranty — Plans and specifications — Fit for specified result
Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW); Strata Schemes Management Act 2015 (NSW)
Rajagopal v Lavish Construction and; Developments Pty Ltd [2025] NSWCATCD 228
BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW) — Insurance — Consequences of failure to obtain — land and home package —rescission of land contract with developer — effect on building contract with builder — liability of builder to return money paid under building contract
Civil and Administrative Tribunal Act 2013 (NSW); Fair Trading Act 1987 (NSW); Home Building Act 1989 (NSW)
Khalil v Secretary, Department of Customer Service [2026] NSWCATOD 49
Administrative Law — home building — qualified supervisor certificate — company in liquidation — whether fit and proper — whether to grant certificate.
Civil and Administrative Tribunal Act 2013; Administrative Decisions Review Act 1997; Home Building Act 1989
East End Stage 2 Pty Ltd v TQM Design & Construct Pty Ltd & Ors [2026] NSWSC 299
BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – Adjudication – Application for interlocutory injunction – where usual practice is to condition the grant of interlocutory relief on payment of the adjudicated amount into Court – where Plaintiff asserts that it is not reasonably able to pay the adjudicated amount into Court and proposes alternative form of security – where Plaintiff asserts that it has paid the Defendant an amount greater than the Adjudicator determined, such that the Defendant has already been paid for the works – whether Court should depart from usual practice – whether proceeding should be stayed pending payment into Court
Building and Construction Industry Security of Payment Act 1999 (NSW) ss 8, 13, 17, 24, 25; Court Suppression and Non-publication Orders Act 2010 (NSW) ss 7, 8; Home Building Act 1989 (NSW) s 92
The Secretary, Department of Customer Service v Scopelliti [2026] NSWCATAP 97
Builders licensing — statutory interpretation — whether Secretary 'must' dismiss application where prior experience of applicant unable to be verified due to death of supervisor
Civil and Administrative Tribunal Act 2013 (NSW); Home Building Act 1989 (NSW); Interpretation Act 1987 (NSW); Licensing and Registration (Uniform Procedures) Act 2002 (NSW)
Australian Trades Pty Ltd v Secretary, Department of Customer Service [2026] NSWCATOD 48
PRACTICE AND PROCEDURE – application to set aside summons – relevance – legitimate forensic purpose – nature of administrative review proceedings
Administrative Decisions Review Act 1997; Civil and Administrative Tribunal Act 2013; Home Building Act 1989
Regulations and other Miscellaneous Documents
Water Sharing Plan for the Gwydir Unregulated River Water Sources 2026 (2026-138) LW 2 April 2026
Water Management (General) Amendment (Miscellaneous) Regulation 2026 (2026-152) LW 10 April 2026
Environmental Planning Instruments
Cabonne Local Environmental Plan 2012 (Map Amendment No 7) (2026-142) LW 2 April 2026
Ku-ring-gai Local Environmental Plan 2015 (Map Amendment No 6) (2026-143) LW 2 April 2026
Maitland Local Environmental Plan 2011 (Amendment No 39) (2026-144) LW 2 April 2026
Maitland Local Environmental Plan 2011 (Amendment No 40) (2026-145) LW 2 April 2026
Oberon Local Environmental Plan 2013 (Amendment No 8) (2026-146) LW 2 April 2026
Penrith Local Environmental Plan 2010 (Map Amendment No 6) (2026-147) LW 2 April 2026
Penrith Local Environmental Plan 2010 (Map Amendment No 8) (2026-148) LW 2 April 2026
Glen Innes Severn Local Environmental Plan 2012 (Amendment No 6) (2026-153) LW 10 April 2026
Nambucca Local Environmental Plan 2010 (Map Amendment No 3) (2026-154) LW 10 April 2026
Parramatta Local Environmental Plan 2023 (Amendment No 20) (2026-155) LW 10 April 2026
Camden Local Environmental Plan 2010 (Map Amendment No 4) (2026-163) LW 17 April 2026
Tamworth Regional Local Environmental Plan 2010 (Map Amendment No 4) (2026-166) LW 17 April 2026
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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