Altavilla v Director General, Department of Fair Trading

[2000] NSWADT 110

CITATION:	Altavilla -v- Director General, Department of Fair Trading [2000] NSWADT 110
DIVISION:	General Division
PARTIES:	APPLICANT Tony Altavilla RESPONDENT Director General, Department of Fair Trading
FILE NUMBER:	003226
HEARING DATES:	31/07/ 2000
SUBMISSIONS CLOSED:	08/11/2000
DATE OF DECISION:	08/15/2000
BEFORE:	Hennessy N (Deputy President)
APPLICATION:	Pawnbrokers & Second-Hand Dealers Act - pawnbrokers licence - revocation or suspension of licence - Pawnbrokers & Second-Hand Dealers Act - second-hand dealers licence - revocation or suspension of licence - Pawnbrokers licence - revocation or suspension of licence - Second-Hand Dealers licence - revocation or suspension of licence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Pawnbrokers and Second-hand Dealers Act 1996
CASES CITED:	Hoban v Davey 1 1972 NSWL 59
REPRESENTATION:	P Mereniuk, solicitor E Kennedy, barrister
ORDERS:	The Director-General's decision to revoke Pawnbrokers and Second hand Dealers Licence No 2PS01715 and to refuse to grant Mr Altavilla a further licence for a peroid of three years, from the date of service of the notice is affirmed.

REASONS FOR DECISION

Introduction

1 Tony Altavilla, the applicant in these proceedings, is the holder of a pawnbrokers and second-hand dealers licence issued in relation to Shop 1 at 23-25 The Boulevard, Woy Woy. The most recent licence was issued on 23 March 1998. On 29 September 1999, Mr Altavilla was convicted of 32 offences of “failing to record a pledge as prescribed”. On 21 March 2000, Mr A was convicted of a further 10 offences of a similar nature. He incurred a total of 84 demerit points under the Pawnbrokers and Second Hand Dealers Act 1996 (the Act) in relation to these convictions.

2 The Director General’s decision, which is subject to review by this Tribunal, was that:

Pursuant to s 36(1)(a) of the Act, Pawnbrokers and Second hand Dealers Licence No 2PS01715 be revoked.
Pursuant to s 36(3) of the Act, the licensee cannot be granted a further licence, for a period of three years from the date of service of the determination; and
Pursuant to s 36(4) or the Act, the licensee within 7 days of service of the determination is to:
• transfer all unredeemed goods to the nearest licensed pawnbroker;
• advise all clients in writing where the goods can be redeemed; and
• place a notice on the front shop window conspicuously displayed and in letters not less than five centimetres in height particulars of the name and address of the licensed pawnbroker from whom the goods may be redeemed.
3 According to the respondent, this decision is the first taken under the Act for breach of the demerit point system.

Tribunal’s jurisdiction

4 Under s 39 of the Act, the Tribunal has power to review certain decisions of the Director-General. Section 39 states that:
(1) An applicant for a licence or for renewal of a licence whose application has been refused may apply to the Administrative Decisions Tribunal for a review of the refusal.
(2) A licensee whose licence has been revoked or suspended by the Director-General, or on whose licence a condition has been imposed (whether on grant or renewal of the licence or otherwise) may apply to the Administrative Decisions Tribunal for a review of the revocation, suspension or imposition.
Preliminary issues

5 The applicant did not apply for an internal review of this decision as required by s 53 of the Administrative Decisions Tribunal Act 1997 (ADT Act). The Tribunal made an order under s 55(2)(c) of the ADT Act that it was necessary to deal with the application, despite the absence of an internal review, in order to protect Mr Altavilla’s interests. The application was made within a reasonable time following the decision of the administrator.

6 On 6 July 2000 the Tribunal granted a stay of the operation of the Director General’s decision which remains in force until further order.

7 On 28 July 2000 Mrs Gail Altavilla, the applicant’s wife, was issued with a Pawnbroker and Second hand dealers licence to carry on business at the same premises as her husband. One of the conditions of the licence was that Mr A “is restricted from having any involvement with the business for a period of 3 years “or such other period that may be determined by the Administrative Appeals Tribunal in respect to any appeal that may be lodged by Mr Altavilla concerning the disciplinary proceedings Notice dated and serviced on 26 June 2000.”

8 I confirmed with Ms Kennedy, who was representing the Director General, that the author of the condition set out above was referring to the Administrative Decisions Tribunal, not the Commonwealth Administrative Appeals Tribunal. I also pointed out that the Tribunal has no power to review conditions attached to Mrs Altavilla’s licence in the absence of any application by Mrs Altavilla to the Tribunal.


Documents before the Tribunal

9 The documents before the Tribunal were a statement from Mr Altavilla dated 7 August 2000, the Department’s file in relation to Mr Altavilla, a statement from Detective Senior Constable Mark Brownlow dated 31 July 2000 and a copy of the charge sheets in relation to 10 matters against Mr Altavilla which were heard at Woy Woy Local Court in March 2000.

Facts

10 The facts set out below were not in dispute.

11 Mr Altavilla has been the proprietor and licensee of the business known as Woy Woy Trading Post Loan Office for approximately eight years. He stocks goods such as small electrical appliances, watches and jewellery, bicycles, motorbikes outboard engines and lawn mowers. The vast majority the goods he holds are “pledged”. This means that a person can leave goods with Mr Altavilla in return for payment of an agreed value. That person can then “redeem” the goods on payment to Mr Altavilla of the agreed value plus interest. If the person does not return to collect the goods within 90 days, Mr Altavilla can sell the goods at auction for whatever price he can get.

12 In 1998 the Police Service set up Strike Force Groenlo on the Central Coast. The purpose of this operation was to reduce property and vehicle theft in the area. One of the areas of operation of the Strike Force was to visit all licensed pawnbrokers and second hand dealers on the Central Coast in order to improve their knowledge of their obligations under the Act and to conduct compliance checks. Initially members of the Strike Force visited all the dealers on the Central Coast, including Mr Altavilla. Dealers were given a copy of a letter dated 7 May 1998 which set out some of the obligations of licensees under the Act, together with a check list. Mr Altavilla received this letter.

13 On 15, 16 and 17 September 1998 several police officers, including Detective Senior Constable Mark Brownlow, attended Mr Altavilla’s premises. During the course of checking Mr Altavilla’s records, 96 discrepancies were discovered in relation to 500-600 items of property. On 22 0ctober 1998, 45 summonses for breaches of s 28(1) of the Act were issued to Mr Altavilla.

14 On 29 September 1999, Mr Altavilla was convicted by the Woy Woy Local Court of 32 offences of “failing to record a pledge as prescribed.” As an example, the court found that Mr Altavilla had recorded the serial number of a bike on a pledge as UA8H0764 whereas the correct number is ACH006426. In other cases, Mr Altavilla or members of his staff had not recorded the serial number at all.

15 Each of the convictions attracted a $100 fine (plus costs) and 2 demerit points under the Act and the Pawnbrokers and Second-hand Dealers Regulation 1997 (the Regulation). The offences for which Mr Altavilla was convicted occurred between 15 January 1998 and 14 September 1998.

16 On 4 August 1999, two months before these convictions, Senior Constable Alison conducted an inspection of Mr Altavilla’s records which resulted in the issue of 10 further summonses. Mr Altavilla was convicted on all 10 matters in Woy Woy Local Court on 21 March 2000 and fined $250 (plus costs) in respect of each matter. He also incurred 2 demerit points under the Act and the Regulations in respect of each conviction.

17 On 1 December 1999 a Notice under s 34(1) of the Act was served on Mr Altavilla requiring him to show cause in writing why his Pawnbrokers and Second Hand Dealers Licence should not be revoked. Mr Altavilla’s solicitor put various matters to the administrator in response to this Notice.

18 On 26 July 2000 the Director General’s delegate notified Mr Altavilla of his decision to revoke his licence and to impose certain further conditions.


Issue

19 The basic issue to be determined is whether the Director General made the correct and preferable decision in deciding to revoke Mr Altavilla’s licence and impose certain further conditions.

Relevant provisions of the Act

20 The Act was proclaimed on 1 June 1996. There are no objects specified in the legislation but the Long Title states that it is:
An Act to provide for the licensing and regulation of pawnbrokers and dealers in certain classes of second-hand goods; to repeal the Pawnbrokers Act 1902, the Second-hand Dealers and Collectors Act 1906 and the Hawkers Act 1974; to amend certain Acts consequentially; and for other purposes.
21 Under the legislation anyone carrying on the business of a pawnbroker or second hand dealer must be licensed. The then Minister for Fair Trading, Ms Lo Po’, said in the Second Reading Speech introducing the Bill, at p 440 that:
The Government is intent on enhancing the capacity of the Police Service to target thieves and those who trade with them and of the Department of Fair Trading to remove dishonest traders from the marketplace.
22 Under s 16(1) and 28(2)(a) of the Act a licensee must keep records of all transactions involving the redemption of any pawned goods including “a fair and reasonable description of the goods, including any serial number or other identifying number and any hallmark, inscription or engraving appearing on the goods.”

23 Section 27 of the Act provides for a demerit points scheme. Pursuant to s 34, if a licensee or any employee of a licensee has been convicted of any offence prescribed by the regulations, the Director-General may endorse, on a record kept in relation to the licensee, particulars of the offence, the penalty, the number of demerit points allocated to the offence and the date on which the offence is alleged to have been committed.

24 Under section 27(3) and section 34 of the Act, the Director General may issue a notice to show cause why a licence should not be revoked, if, among other things, a licensee incurs a total of 12 or more demerit points within any 3 year period. If, after considering any response to the Notice to Show Cause, the Director General is satisfied that the ground in the Notice has been substantiated, he may revoke the licence or make certain other decisions. The relevant parts of section 36 of the Act state that:

(1) . . . If, . . . the Director-General is satisfied on the balance of probabilities that the ground of any notice under section 34 has been substantiated against the licensee, the Director-General may:
(a) revoke the licence, or suspend it for such portion of the remainder of its duration as the Director-General thinks fit, or
(b) attach one or more conditions to it, or
(c) determine that the licence is not to be renewed, or that a licence is not to be granted to the same licensee in future, unless one or more conditions are attached to it on grant or renewal.
(2) Without limiting the generality of subsection (1) (b), the Director-General may specify, as a condition to be imposed in accordance with that paragraph in respect of the licence of a corporate licensee, that a particular director or officer of the corporation must not (either for a specified period or permanently, as the Director-General may determine) be concerned in the management of the licensed business.
(3) The Director-General, on revoking a licence, may specify a period during which the licensee cannot be granted a further licence, and such a specification precludes the grant of a licence during that period.
(4) The Director-General, on revoking or suspending a licence, may, where the licensed business consisted of or included pawnbroking, make such order as the Director-General thinks fit in relation to the redemption of goods held in the course of that business.
Applicant’s submissions

25 Mr Altavilla maintained that the breaches of the Act arose due to the continuation of his practices in accordance with the “old” Act. He said he knew there were changes to the Act but he did not appreciate the level of information that was required to be kept to comply with the legislation. Mr Altavilla explained the breaches by saying that the majority were committed by employees who have now been dismissed. He admitted that he never checked the serial numbers that were being recorded by staff.

26 He says he has changed his system of operating since he was convicted on 29 September 1999. Specifically he says he has:

· dismissed two former employees and now has only one staff member;
· trained existing staff;
· installed computer soft ware; and
· maintained his presence on the premises most of the time.

27 Mr Altavilla said that his current compliance with the legislation is demonstrated by the fact that police have attended his premises every third week since September 1999 to download all the data he has on his computer and that he has not been charged with any further offences.

28 Further, Mr Altavilla says that there are several other factors which discourage clients from attempting to pledge stolen property. These include requests for identification and refusal to deal with people who do not live in the area.

29 According to Mr A, Woy Woy is a small town and police are aware of people who are attempting off load stolen goods. Finally Mr Altavilla submitted that it is not worth his while taking the risk of receiving stolen goods because he will not be able to recover his money.

30 The main thrust of the applicant’s submission was that the matching of descriptions, including serial numbers, on goods suspected of being stolen, is only one means of deterring people from dealing in stolen goods. Mr Mereniuk, on behalf of Mr Altavilla, relied on correspondence from Detective Brownlow’s to assert that not every person from whom goods have been stolen, keeps a record of the serial number of the property. The applicant has developed certain practices which minimise the likelihood of stolen goods being pledged. In Mr Mereniuk’s submission, the Director General has failed to take into account Mr Altavilla’s policies of only dealing with local/regular clients and of screening clients before goods are pledged.

31 Finally, Mr Mereniuk submitted that the Director General does not have power under s 36 of the Act, to revoke Mr Altavilla’s licence and determine that he cannot be granted a further licence for a period of three years. The basis of Mr Mereniuk’s submission is that the paragraphs of s 36(1) are connected by the word “or” rather than “and” so only one of the alternatives in that sub-section can be applied.


Respondent’s submissions

32 According to the respondent’s submissions, pawnbrokers have been a traditional avenue for the disposal of stolen goods. One means of discouraging thieves is to make it difficult for them to dispose of stolen goods. The Act seeks to achieve this by requiring licensed pawnbrokers to accurately record items pledged to assist in the identification of stolen goods and to increase the likelihood that those dealing in stolen goods will be identified.

33 The Act also allows the Director General to revoke, or impose conditions on, any licensee who incurs 12 demerit points in a three year period. The applicant has incurred 84 demerit points within a three year period.

34 Ms Kennedy, on behalf of the respondent, submitted that s 36(1) of the Act means that once the Director General is satisfied that the applicant has incurred a total of 12 or more demerit points within 3 years, the only options are to revoke the licence, to attach conditions to the licence or to determine that the licence is not to be renewed or granted in the future unless conditions are attached. In Ms Kennedy’s submission, despite the use of the word “may” in s 36(1), the Director General does not have the option of taking no action.


Reasoning and decision

35 I do not accept Ms Kennedy’s submission that the Director General must take some action in every case where the requirement in s 36(1) are satisfied. Section 9 of the Interpretation Act 1987 (NSW) states that:
(1) In any Act or instrument, the word "may", if used to confer a power, indicates that the power may be exercised or not, at discretion.
(2) In any Act or instrument, the word "shall", if used to impose a duty, indicates that the duty must be performed.

36 The use of the word “may” and the plain meaning of s 36(1), is that the Director General has a discretion to take certain action in accordance with that section, or to take no action. If parliament intended that it should be mandatory for the Director General to implement one of the options set out in s 36, the word “shall” rather than “may” would have been used.

37 I also reject the applicant’s submission that the Director General has acted beyond power in making the determinations in relation to Mr Altavilla’s licence under s 36 of the Act. It is true that the paragraphs in s 36(1)(a) are joined by the word “or” and must, in the absence of any clear anomaly, be interpreted disjunctively. However, the Director General made a determination under s 36(1)(a), not under s 36(1)(a) and (c) as submitted by the applicant. The determination that the licensee cannot be granted a further licence, for a period of three years from the date of service of the determination, was made under s 36(3) of the Act.

38 There was no dispute that Mr Altavilla had accumulated the relevant number of demerit points within the specified period so that the Director General was able to his exercise discretion under s 36 of the Act to revoke, suspend or place conditions on the licence. That discretion is undefined. It is not limited by any factors set out in the legislation. The objects of the Act are not spelt out but based on the Second Reading Speech, those objects include targeting thieves and removing dishonest (and presumably negligent or careless) traders from the marketplace. There is no evidence that Mr Altavilla is dishonest in the sense that he or his staff intentionally misdescribed pledged goods. But the evidence does demonstrate that Mr Altavilla did not take adequate steps, for over three years (from 1 June 1996 to September 1999) to ensure that the requirements of the Act were met. His failure to do would have made it more difficult for police to target thieves.

39 The purpose of the provisions in s 36 appear to be predominantly the protection of the public from dishonest or careless traders rather than the punishment of offenders. (See Hoban v Davey 1 1972 NSWL 59.)

40 The matching of descriptions of pledged goods with goods reported as being stolen, is one means employed in the Act for deterring people from stealing goods and from disposing of them through pawnbrokers. I accept Mr Mereniuk’s submission that there are many other deterrents in the legislation as well as in the practices that Mr Altavilla employs. However the existence of other deterrents does not lessen the importance of licensees providing a fair and reasonable description of goods.

41 I accept Mr Altavilla’s unchallenged evidence that police officers have regularly attended his premises since September 1999 and that he has not been charged with any further offences. This is an indication that he is currently complying with the legislation.

42 The situation, in summary, is that Mr Altavilla has breached the Act over a period spanning more than three years, incurring 84 demerit points. However, he currently appears to be complying with the legislation. As Mr Mereniuk pointed out, Mr Altavilla has paid over $21,000 in fines and now has a criminal record.

43 Despite the fact that Mr Altavilla has been complying with the Act for nearly 12 months, and that he has paid a significant amount in fines, in my view his past conduct justifies the disciplinary action taken by the Director General. The present legislation commenced on 1 June 1996. For a period of over 3 years, until September 1999, Mr Altavilla failed to take sufficient steps to ensure that pledged goods were fairly and reasonably described. I do not accept his justification that he was working under the “old” Act. In May 1998 he was given a notice and a checklist by the police. Not only did he fail to apply the principles in that notice to his business but despite being charged with numerous offences in October 1998, Mr Altavilla operated his business in breach of the requirements of the Act until September 1999. He admitted that he never checked the descriptions his employees gave of pledged goods.

44 For these reasons, I affirm the Director-General’s decision to revoke Pawnbrokers and Second hand Dealers Licence No 2PS01715 and to refuse to grant Mr Altavilla a further licence for a period of three years, from the date of service of the notice.

45 In relation to the decision about transferring unredeemed goods and advising clients, it does not appear that the Tribunal has jurisdiction to affirm or set aside those orders. Under s 39 of the Act, set out above at paragraph 4, the Tribunal has power to review decisions to revoke, suspend or impose conditions on a licence. Section 36(4) enables the Director General to make such orders as he thinks fit in relation to the redemption of goods held in the course of that business. Section 36(4) states that:

The Director-General, on revoking or suspending a licence, may, where the licensed business consisted of or included pawnbroking, make such order as the Director-General thinks fit in relation to the redemption of goods held in the course of that business.
46 These are not orders to revoke, suspend or impose conditions on a licence and consequently, I make no orders in relation to them.