Amendolia v Director General, Department of Fair Trading

[2000] NSWADT 190

CITATION:	Amendolia -v- Director General, Department of Fair Trading [2000] NSWADT 190
DIVISION:	General Division
PARTIES:	APPLICANTS Joseph Amendolia Nancy Amendolia RESPONDENT Director General, Department of Fair Trading
FILE NUMBER:	003185
HEARING DATES:	02/08/2000
SUBMISSIONS CLOSED:	08/22/2000
DATE OF DECISION:	12/22/2000
BEFORE:	Britton A - Judicial Member
APPLICATION:	Pawnbrokers & Second-Hand Dealers Act - second-hand dealers licence - revocation or suspension of licence - Pawnbrokers licence - impose a condition on licence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Pawnbrokers and Second-hand Dealers Act 1996 Pawnbrokers and Second-hand Dealers Regulation 1997
CASES CITED:
REPRESENTATION:	APPLICANTS In person RESPONDENT A Grey, solicitor
ORDERS:	The decision under review is affirmed.

1 This decision concerns a review of the decision by the Director General, Department of Fair Trading (the administrator), to impose as a condition of the applicant’s second-hand dealers licence, the requirement that it create and store various records in electronic form. The directors of the applicant are Nancy Ames (also known as Amendolia) and her husband Joseph Amendolia. The applicant trades as Neptune Marine.

2 In November 1998 the applicant applied for a second-hand dealers licence under the Pawn Brokers and Second- Hand Dealers Act 1996 (the Act). The applicant applied for an exemption under Clause 13A (1) of the Act from the requirement to store various records in electronic form.

3 On 15 January 1999 the respondent issued the Applicant with a second-hand dealers licence subject to the following condition:

"You must use electronic means of creation and storage of records for the purposes of Sections 16 and 28 of the Pawnbrokers and Second-hand Dealers Act 1996, using software which complies with the specifications issued by the New South Wales Police Service titled 'Pawnbroker and Second-hand Dealers System ( Dealers Software Specifications)', as modified from time to time."

4 In the applicant’s annual licensee statement provided to the respondent and dated 17 January 2000 the applicant indicated it sought an exemption from the requirement for electronic record keeping. This was refused.

5 The applicant sought a review of the decision to issue the licence subject to the above condition. By way of notice dated 8 March 2000, a delegate of the administrator, advised the applicant of the decision not to grant an exemption from the requirement for electronic record keeping. An internal review affirmed the administrator’s original decision. On 31 May 2000 the applicant filed an application with the Administrative Decisions Tribunal of NSW (the Tribunal) for a review of that decision.

6 The Tribunal has jurisdiction to review the administrator’s decision pursuant to section 38 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act) and section 39(2) of the Act.

Procedural Issues

7 This matter came before the Tribunal on 2 August 2000. The applicants were not legally represented. Mr Grey represented the respondent and tendered the Department’s file on the applicant. No witnesses were called by either party.

8 At the conclusion of the hearing the Tribunal gave the applicant the opportunity to put on further evidence about the periods for which Mr Amendolia held a licence and the advice received from the Sutherland Local Court about the procedures for licence renewals at the relevant time. The respondent was directed to provide to the Tribunal an outline of the procedures adopted to advise licensees of the changes to licensing procedures that occurred following the repeal of the Second-hand Dealers and Collectors Act, 1902 (the 1902 Act)

Relevant Law

9 The Act provides, among other things, that the administrator may issue a licence subject to any conditions that he or she thinks fit: section 11(1). The Pawnbrokers and Second-hand Dealers Regulations 1997 (“the Regulations”) sets out the provisions in relation to such conditions: section 11(2).

10 Sections 16 of the Act requires licensed second-hand dealers to keep certain records and relevantly provides:

16 Records
(1) A licensee must keep records, in the manner and containing the particulars prescribed by the regulations, of all transactions:
(a) for the acquisition or disposal of second-hand goods,
(b) for the redemption of any pawned goods, or the disposal of any forfeit pledge, and of such other matters pertaining to the business of a licensee as the regulations may prescribe.
. . . . .
(7) Without affecting the generality of subsections (1) and (2) or the power of the Director General under section 11, the regulations may make provision for or with respect to requiring the use by licensees of electronic methods of creation and storage of records that licensees are required under this section to keep.

11 Clause 13 of the Regulations prescribes the method of keeping of records and provides:

13 Records Generally
(1) Records maintained for the purposes of the Act may be kept electronically or in a bound (not loose-leaf) book.
(2) In the case of any licence issued or renewed on or after 1 January 1999, the Director-General is to require the licensee, by way of a condition of the licence, to use electronic means of creation and storage of records kept for the purposes of section 16 or 28 of the Act using software specified, or of a kind specified, in the condition.

12 Clause 13(4) of the Regulations is central to this inquiry and provides:

In the case of any licence issued or renewed on or after 1 January 1999, the Director-General is to require the licensee, by way of a condition of the licence, to use electronic means of creation and storage of records kept for the purposes of section 16 or 28 of the Act using software specified, or of a kind specified, in the condition.

13 Clause 13A of the Regulations relevantly provides:

13A Special provisions relating to the keeping of records by certain licensees .
(1) A person who held a second-hand dealer's licence under the Second-hand Dealers and Collectors Act 1906 immediately before the repeal of that Act on 30 April 1997 and who has never held a licence issued with a condition requiring the use of electronic means of creation and storage of records, may, when applying for the issue or renewal of a licence on or after 1 January 1999 (being a licence authorising the person to carry on the business of a second-hand dealer, but not the business of a pawnbroker), apply to have the licence issued or renewed without such a condition.
(2) Despite clause 13 (4), if a person makes such an application, the Director-General must not impose such a condition if:
(a) the Director-General is satisfied that the person was entitled to make such an application, and
(b) the Director-General is satisfied, after having regard to both of the relevant documents in relation to the person's business, that the gross receipts of the business relating to used goods totalled $150,000 or less in the previous financial year or (if appropriate) the financial year before that.
Issues

14 The issues for the Tribunal to determine in this matter are:

Did the applicant, or one of its directors, hold a second-hand dealers licence under the Second-hand Dealers and Collectors Act, 1902 (the 1902 Act) immediately prior to April 30 1997?
If not, does the Act provide the administrator with a discretion not to impose the condition that the applicant keep records in a prescribed electronic form?
Has the power granted to the administrator to impose the condition to maintain records in electronic form been properly exercised in terms of the condition imposed?

Evidence

15 It is not in dispute that Mr Amendolia held a valid second-hand dealers licence issued pursuant to the 1902 Act, continuously, from 1980 until 1986. On 21 February 1995 he was issued a second-hand dealers licence by the Local Court Sutherland. This licence expired on 7 March 1996.

16 Mr Amendolia gave evidence that it was his practice throughout the period 1980 to 1996, to take steps to renew his licence prior to its expiry date. He applied in person each year for his licence to be renewed at the Sutherland Local Court.

17 Mr Amendolia gave evidence that some time in 1996 he visited the Sutherland Local Court and was advised that the function of licensing second-hand dealers had been handed over to the Department of Fair Trading and he could expect to receive a renewal notice from the Department in due course. According to Mr Amendolia after this visit, he received no correspondence relating to his licence from either the Department of Fair Trading or the Local Court.

18 He gave evidence that in the absence of any such reminder he overlooked the fact that his 1995 licence had expired and took no steps to renew his licence until November 1998.

19 In response to a request from the Tribunal, the respondent provided details of the procedures employed at the time the administration of second-hand dealers licensing was handed over from the Local Court to the respondent in April 1997, following the repeal of the 1902 Act.

20 The respondent submitted that to the best of its knowledge the practice of most Local courts was to send renewal notices to licensees prior to the expiration of their licence. The respondent was unable to advise on whether this was the case in respect of Sutherland Local Court. The respondent sent renewal notices to licensees whose licences were due to expire after 30 April 1997, based on information provided by the Local Court. The respondent did not send renewal notices or any information of a general or specific nature in respect of licences, which had expired prior to 30 April 1997.

21 Mr and Mrs Amendolia gave evidence that the profit generated by their business is extremely modest and the proportion of total income generated by the sale of second-hand goods is very small. Given this, the requirement that they keep records in electronic form in their view would impose a significant and unwarranted cost impost on their business. Further they are inexperienced in electronic record keeping.

22 Further they gave evidence that their second- hand dealers records have always been maintained in a proper and careful manner (albeit in hard copy form). No complaint has ever been raised with respect to the operation of their second-hand dealers licence nor have any of the directors or associates of the company been convicted of a dishonesty offence. The respondent does not dispute this.

Findings and Conclusions

23 The first issue to be determined is whether the applicant can rely on the exemption set out in Clause 13A of the Regulations. Clause 13A provides that a person who held a second-hand dealers licence under the 1902 Act immediately before 30 April 1997 may apply to have a licence issued without the condition that records be kept in electronic form.

24 The Tribunal broadly accepts Mr Amendolia’s evidence that he was incorrectly advised by an officer of the Sutherland Local Court about the licensing arrangements that would apply prior to, and immediately following the repeal of the 1902 Act. I note that it has not been suggested by Mr Amendolia that this advice was to the effect that a licence would no longer be required, but rather related to the renewal procedure. The evidence is not entirely clear as to when Mr Amendolia received this advice.

25 While the advice provided by the Local Court may have been inaccurate in relation to certain administrative arrangements, the uncontroverted evidence before me is that at the relevant time, namely 30 April 1996, Mr Amendolia was without a current licence and had been so for over 12 months. He took no steps to have his licence renewed until as late as November 1998.

26 It is clear from both the Act and the 1902 Act that the obligation to maintain a current second-hand dealers licence lies with the licence holder. There may be cases where it would be relevant for this Tribunal to take into account inaccurate advice provided by a licensing authority on which a person had relied, to their detriment. However in this case, prior to 30 April 1997, Mr Amendolia had been operating for some twelve months without a valid licence and following his initial inquiry at the Sutherland Local Court he made no further efforts to determine the whereabouts of the renewal form or the status of his licence. I am not persuaded that the applicant can abrogate his obligation to maintain a valid licence on the basis of advice received by the Local Court. Indeed, given the significant passage of time between the expiration of Mr Amendolia’s 1995 licence and the relevant date for the purpose of triggering the clause 13A(1) exemption, I am not persuaded that any incorrect advice that may have been given to Mr Amendolia is relevant to my determination. The evidence is clear: neither Mr Amendolia nor the applicant held a current second dealers licence as at 30 April 1997, consequently neither the applicant nor Mr Amendolia are entitled to rely on the exemption available under clause 13A (1) of the Regulations.

27 I turn now to consider whether the Act provides the administrator with a discretion not to impose the condition that the applicant (or Mr Amendolia) maintain and store records in electronic form. Clause 13(4) of the Regulations is expressed in mandatory terms, requiring the Director General to require of licensees, by way of a condition of licence, that they keep electronic records for the purpose of compliance with section 16 of the Act. It is clear from a reading of clauses 13 and 13A that the Director General has no discretion in relation to clause 13(4), unless the applicant falls within the exemption described in Clause 13A.

28 It remains for me to consider whether the power to impose the condition to maintain records in electronic form has been properly exercised in terms of the condition imposed. It is submitted on behalf of the applicant that this condition would cause financial hardship and in any event is unwarranted given their previous record of compliance. This issue was extensively canvassed in the decision of G Fleming in Flens and Anor v Department of Fair Trading [1999] NSW ADT 76, where an identical condition to that imposed on the applicant was considered. In that decision [at 27] Ms Fleming stated, “ Having regard to the purpose of the provisions in relation to record keeping, the Tribunal is of the view that the condition imposed is a proper exercise of the power of the respondent and is both reasonable and appropriate”. I concur with that view.

29 Accordingly I find that the decision of the respondent to issue a second-hand dealers licence to the applicant subject to the condition stated is the correct and preferable decision.

30 The decision of the administrator is affirmed.