Brisbane Loan Office P/L v The Commissioner for Fair Trading - [2005] NSWSC 208

No judgment structure available for this case.

Reported Decision:
152 A Crim R 175

New South Wales

Supreme Court

CITATION:
Brisbane Loan Office P/L v The Commissioner for Fair Trading [2005] NSWSC 208

HEARING DATE(S): 09/03/05

JUDGMENT DATE :

9 March 2005

JUDGMENT OF:
James J at 1

DECISION:
The plaintiff's claim for a final injunction is dismissed

CATCHWORDS:
PRACTICE AND PROCEDURE - stay of proceedings - notice to show cause pursuant to s 34 of the Pawnbrokers and Second-hand Dealers Act 1996 ("the Act") - alleged breaches of the Act by plaintiff - criminal proceedings pending against an officer and an employee of the plaintiff for breaches of the Act - whether the Commissioner for Fair Trading should be restrained from acting on the notice to show cause until the criminal proceedings are finally determined - WORDS AND PHRASES - prosecuted

LEGISLATION CITED:
Companies Code (NSW)
Crimes Act (NSW)
Crimes Act 1914 (Commonwealth)
National Companies and Securities Commission (State Provisions) Act (NSW)
Passports Act (Commonwealth)
Pawnbrokers and Second-hand Dealers Act 1996 (NSW)
Pawnbrokers and Second Hand Dealers Regulation 2003 (NSW)

CASES CITED:
Brown v Corporate Affairs Commission (NSW) (1989) 14 ACLR 781
Dwyer v National Companies & Securities Commission (1988) 13 ACLR 716
Hammond v The Commonwealth of Australia (1982) 152 CLR 188

PARTIES:
Brisband Loan Office Pty Limited v TheCommissioner for Fair Trading

FILE NUMBER(S):
SC 30098/04

COUNSEL:
N Perram - Plaintiff
Ms R Henderson - Defendant

SOLICITORS:
Henry Davis York
C Pacey - Legal Service Division

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
ADMINISTRATIVE LAW LIST

JAMES J

WEDNESDAY 9 MARCH 2005

30098/04 - BRISBANE LOAN OFFICE PTY LTD v COMMISSIONER FOR FAIR TRADING
JUDGMENT

1 HIS HONOUR: In these proceedings brought by the plaintiff Brisbane Loan Office Pty Limited against the defendant the Commissioner for Fair Trading the plaintiff claims an order that the defendant be restrained from taking any steps pursuant to a notice to show cause pursuant to s 34 of the Pawnbrokers and Second-hand Dealers Act 1996 (“the Act”) until the trials of two persons Neville Isaac Davidson and Martin Frederick Spong, who have been charged with offences under the Act, have been finally determined.

2 At the hearing I was informed by counsel for the plaintiff that the second paragraph in the summons by which the proceedings were commenced in which other relief was claimed was no longer pressed.

3 The plaintiff has for a number of years carried on a pawnbroking and second-hand dealer’s business. Since 1993 Mr Davidson has been a director of the plaintiff. Mr Spong is, or at least was until recently, the general manager of the plaintiff.

4 In 1999 the plaintiff was issued with a licence under the Act authorising it to carry on business as a pawnbroker and a dealer in second-hand goods. The licence has been renewed annually and the current renewal of the licence is due to expire on 21 June 2005.

5 On 4 August 2004 police attended the plaintiff’s premises at 99 Oxford Street Bondi Junction. The police examined the records of the plaintiff and interviewed Mr Davidson and Mr Spong.

6 On 12 August 2004 police reported to the Commissioner for Fair Trading that their investigations had revealed more than 14,000 breaches of the Act by the plaintiff.

7 On 14 September 2004 Mr Davidson was served with court attendance notices for 14 charges against him. These charges comprised eight charges of offences under s 28(1) of the Act, one charge of an offence under s 21(1)(a) of the Act, one charge of an offence under s 16(5) of the Act, three charges of offences under section 9A(1)(d) of the Passports Act (Commonwealth), and one charge of an offence under s 527C(1)(c) of the Crimes Act.

8 On the same day 14 September 2004 Mr Spong was served with court attendance notices for 48 charges against him. These charges comprised eight charges of offences under s 28(1) of the Act, one charge of an offence under s 21(1)(a) of the Act, one charge of an offence under s 16(5) of the Act, 34 charges of offences under section 16(5A) of the Act, three charges of offences under s 9A(1)(d) of the Passports Act (Commonwealth), and one charge of an offence under s 527C(1)(c) of the Crimes Act.

9 It is convenient at this stage to set out the provisions of the Act under which the charges were brought and certain other provisions of the Act.

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10 Section 9A(1)(d) of the Passports Act (Commonwealth) provides that a person who without reasonable excuse has in his possession or control a passport which was not issued to him is guilty of an offence.

11 Section 527C(1)(c) of the Crimes Act provides that a person who has anything which may reasonably be suspected of being stolen is guilty of an offence.

12 A condition of the licence under the Act issued to the plaintiff was that the plaintiff had to use electronic means of creation and storage of records for the purposes of ss 16 and 28 of the Act using software complying with specifications issued by the New South Wales Police Service. Clause 16 of the Pawnbrokers and Second-hand Dealers Regulation 2003 provides that where a licensee is required by reason of a condition on its licence to create and store records in electronic form those records shall be transmitted to the Commissioner of Police in electronic form within three working days of the record being created.

13 On or about 27 September 2004 the plaintiff was served with a notice dated 27 September 2004 from a delegate of the Commissioner for Fair Trading to show cause why the plaintiff should not be dealt with in accordance with s 36 of the Act. It is this notice which the plaintiff seeks to have the Commissioner restrained from taking any steps to pursue.

14 In annexure A to the notice particulars were given of breaches of the Act allegedly detected during the police investigation of the plaintiff’s records and stock. It was alleged that in breach of s 21(1)(a) of the Act the plaintiff had committed one offence of failing to keep second hand goods purchased or received for a period of fourteen days on premises which had been nominated by the plaintiff. It was alleged that in breach of s 16(5) of the Act the plaintiff had committed one offence of failing to keep records of a transaction for a period of three years after they were made. It was further alleged that in breach of section 28(2) of the Act the plaintiff had committed a number of offences of failing to include in the record of a transaction a fair and reasonable description of the goods, including any serial number or other identification number. It was alleged that in breach of s 16(5A) of the Act the plaintiff had committed a number of offences of failing to furnish records of transactions to the police within the required time after the records were made. Either no record at all of the transaction had been furnished or a record had been furnished only after the prescribed time had elapsed or the record furnished had been defective and had been rejected and no complying record had subsequently been sent.

15 In the second part of annexure A to the notice it was alleged that the plaintiff was probably receiving or dealing in stolen goods. It was alleged that in breach of section 15(2) of the Act the plaintiff had accepted goods offered for sale or pawn from certain named individuals when there were reasonable grounds to believe that the goods concerned were not the property of the person by whom they were offered.

16 It was common ground at the hearing that there was a close correspondence between the offences under the Act with which Mr Davidson and Mr Spong had been charged and the particulars furnished by the Commissioner in the annexure to the notice to show cause.

17 An issue which arose at the hearing was whether the notice to show cause was wholly based on s 34(1)(c) of the Act or was partly based on s 34(1)(c) and partly based on s 34(1)(f). The notice itself, which appears at page 48 of a volume containing exhibits to an affidavit by a solicitor acting for the plaintiff, refers only to section 34(1)(c). However, in annexure A there is a reference to s 34(1)(f).

18 In my opinion the notice at page 48 of the volume of exhibits should be regarded as prevailing over the annexure which merely purports to set out particulars of the matters relied on in the notice. Furthermore, the language used in the annexure is not, in some respects, apt to found a notice based on s 34(1)(f).

19 On 7 October 2004 the solicitors for the plaintiff wrote a letter to the Commissioner for Fair Trading asking him not to proceed further on or to withdraw the notice to show cause which had been served.

20 In this letter it was submitted that the alleged contraventions in the notice to show cause were identical with the charges brought against Mr Davidson and Mr Spong in the criminal proceedings, which would be defended by Mr Davidson and Mr Spong, and prejudice would be suffered if the plaintiff had to respond to the notice to show cause while the criminal proceedings were still pending.

21 In a letter dated 19 October 2004 from the Commissioner for Fair Trading to the plaintiff’s solicitors it was asserted that the power the Commission was exercising was for the protection of the public and that it was not premature for the Commissioner to serve a notice when criminal proceedings were pending against an officer and an employee of the plaintiff.

22 On 26 October 2004 directions were given in the criminal proceedings that the police brief be served by 7 December 2004 and the proceedings were stood over to 14 January 2005. I was informed at the hearing of the present proceedings that the police brief has now been served on Mr Davidson and Mr Spong, and that the criminal proceedings against them are still pending.

23 The present proceedings were commenced on 28 October 2004. At the same time as the summons was filed a notice of motion was filed, seeking an interlocutory injunction that the defendant be restrained from taking any steps pursuant to the notice to show cause. The application was supported by an affidavit by the plaintiff’s solicitor, Mr Koops. Paragraphs 18 and 19 of this affidavit were in the following terms:

”18. It is my belief that in order for the plaintiff to respond meaningfully to the notice to show cause, it will be necessary for Messrs Davidson and Spong to adduce evidence on behalf of the plaintiff relating to the matters the subject of the criminal proceedings.

19. I am instructed that Messrs Davidson and Spong do not wish to adduce evidence to the Commissioner for Fair Trading in answer to the notice to show cause prior to the final determination of the criminal proceedings lest that evidence prejudice those proceedings”.

24 Another shorter affidavit by Mr Koops was filed in which it was asserted that police had seized and not returned a number of the plaintiff’s documents.

25 The application for an interlocutory injunction was heard by Howie J, who gave judgment on 4 November 2004. In his judgment Howie J said that an interlocutory injunction was being sought by the plaintiff on two grounds, firstly, that Mr Davidson and Mr Spong would be prejudiced in defending the criminal proceedings if the plaintiff had to answer the show cause notice while the criminal proceedings were still pending and, secondly, that a number of the plaintiff’s documents had been seized by police and without access to those documents the plaintiff would be prejudiced in answering the show cause notice.

26 In paragraphs 17 and 18 of his Honour’s judgment, his Honour said:

“17. It is not for me to decide whether in the circumstances of this particular case and having regard to the nature of the proceedings the Commissioner wishes to take, the criminal proceedings against Mr Davidson and Mr Spong should take priority over the show cause proceedings. It is sufficient for present purposes that I conclude that there is no certainty that the result of the substantive proceedings in this Court would be to preclude the Commissioner from conducting show cause proceedings simply on the basis of the impact that they might have upon the ability of Mr Davidson and Mr Spong to defend themselves before the Local Court.

18. I am less persuaded that the second matter complained of has any real substance. However, as I have indicated, it seems to me that that issue can probably be very soon resolved by the serving of the police brief and the returning of any documents the police have retained to the company. If it were the only matter then raised by the plaintiff, I am not sure I would grant interlocutory relief. I would need more persuasion that significant prejudice would be occasioned to the company by the absence of those documents”.

27 In deciding to grant interlocutory relief Howie J was influenced by considerations that, unless interlocutory relief was granted, the proceedings for principal relief would be rendered futile, that on the evidence the plaintiff’s business was a “longstanding” business, that to refuse interlocutory relief would impose hardship on the plaintiff and its employees and that the plaintiff was prepared to offer undertakings, which his Honour regarded as significant, about the conduct of its business during the currency of an interlocutory injunction.

28 His Honour made an order restraining the Commissioner until further order from taking any steps pursuant to the show cause notice, upon the usual undertaking as to damages and additional undertakings that Mr Spong would be suspended from his position as general manager responsible for the plaintiff’s computer reporting duties to the New South Wales Police and be replaced by another employee, Mr Kiss; that Mr Davidson supervise Mr Kiss and any other employee working for the business; and that the plaintiff comply with the conditions of its licence and the provisions of the Act.

29 Since Howie J gave his judgment on 4 November 2004 the only further document filed in the proceedings has been an affidavit by Mr Christopher Joseph Hanlon, director of the Compliance and Standards Division of the Office of Fair Trading. In his affidavit Mr Hanlon gave evidence about licensing of pawnbrokers and dealers in second-hand goods. Paragraphs 9, 10 and 11 of his affidavit were in the following terms:

“9. The purpose of requiring licensees to transmit records to the Commissioner of Police is as follows. NSW Police maintain a link between information received from licensees and information relating to stolen property. Serial numbers, descriptions and other distinguishing features of property received by licensees is matched against serial number, descriptions and other identifying or distinguishing marks on property reported as stolen. Where a match is made Police make enquiries with respect to the identity of the person or persons who provided the property to the licensee.

10. My understanding from my dealings with NSW Police with respect to pawnbroker information is that this system is effective in detecting stolen property. The system principally relies on matching serial numbers and other identifying or distinguishing marks. Where a serial number is incorrectly recorded by a licensee, and there are no other identifying or distinguishing marks on the property, there is little prospect of the goods being matched and recovered. Whether incorrect recording occurs as a result of inadvertence or misconduct is immaterial.

11. In my experience a high proportion of stolen property is stolen to provide a source of money to the thief. My experience is that much of this money is used to purchase illicit drugs. In my experience many thieves dispose of stolen property by using the services of pawnbrokers. In many cases thieves do nothing to hide their identity. This means that where pawned property is identified as stolen property there is, in addition to recovering stolen items, an opportunity to identify the person or person responsible for the theft. As can be seen, adherence to the requirements of the Act with respect to recording and transmitting details of property received by the licensee is an important part of the suppression of the trade in stolen goods”.

30 A number of written and oral submissions were made by counsel for the parties.

31 It was recognised by counsel for the plaintiff that the provisions of s 34(1)(c) of the Act, depending upon the proper interpretation of those provisions, might create an obstacle for the plaintiff. I have already set out the terms of s 34(1)(c), which provides that the Director General may serve a notice to show cause on a licensee who or one of whose employees has contravened a provision of the Act or of regulations under the Act, “whether or not the licensee or employee has been prosecuted for or convicted of an offence in respect of the contravention”.

32 Counsel for the plaintiff submitted that it was significant that in the words which I have just quoted the verb “prosecuted” is in the perfect tense. It was submitted that it is only if the prosecution process has been completed and has resulted in an outcome other than conviction that the word “prosecuted” in s 34(1)(c) would apply. Counsel submitted that it was significant that the Legislature had not used some expression such as “whether or not the prosecution (against the licensee or employee) has commenced”.

33 I do not consider that these submissions about the proper interpretation of the word “prosecuted” in s 34(1)(c) should be accepted. In my opinion, the word “prosecuted” simply refers to criminal proceedings having been instituted. That is the usual, or at least a common meaning of the word “prosecuted”, when used in a legal context.

34 In the Oxford English Dictionary, after a number of general definitions of the word “prosecute” are given, the following definition is given:

“Law - to institute legal proceedings against a person for some offence; to arraign before a court of justice for some crime or wrong.”

35 In the third edition of the Macquarie Dictionary the first meaning given for the word “prosecute” is:

“Law - to institute legal proceedings against a person… to seek to enforce or obtain by legal process.”

36 In my opinion, s 34(1)(c) should be interpreted as meaning that a notice to show cause may be served if the licensee or one of its employees has contravened a provision of the Act or of a regulation under the Act, whether or not a prosecution of the licensee or the employee for an offence in respect of the contravention has been instituted, and whether or not the licensee or the employee has been convicted of an offence in respect of the contravention.

37 It was submitted by counsel for the plaintiff that such an interpretation left no work for the word “convicted” in s 34(1)(c ) to do. In my opinion, the use of the word “convicted” in addition to the use of the word “prosecuted” can be explained on the basis that the Legislature wanted to make it quite clear that a notice could be served, even if a prosecution of the licensee or an employee of the licensee had been commenced or even if the licensee or an employee had actually been convicted of an offence in respect of the contravention. The use of the word “convicted” also has the function of forestalling any possible argument that a licensee or an employee, who has been prosecuted to the stage where the licensee or employee has been convicted, is thereafter no longer properly to be regarded as a person who has been “prosecuted” but is to be regarded as a person who has been “convicted”.

38 The conclusion I have reached about the proper interpretation of the word “prosecuted” in s 34(1)(c) of the Act in my opinion virtually disposes of the plaintiff’s claim. However, if, notwithstanding the interpretation I have given to the word “prosecuted” in s 34(1)(c), this Court retains a general power to stay proceedings on a notice to show cause under s 34 of the Act, it would, in my opinion, be necessary, before any such stay could be granted, that the licensee demonstrate something more than merely that the licensee or an employee of the licensee has been prosecuted for an offence in respect of the contravention relied on in the notice to show cause. In the present case no ground for a stay of proceedings on the notice to show cause has been demonstrated, apart from matters of a kind which would necessarily flow in any case in which the licensee or an employee of the licensee is simultaneously being prosecuted for an offence in respect of the contravention. No special prejudice has been shown by the plaintiff.

39 A submission was made in the course of oral argument that the Commissioner for Fair Trading had erred in the exercise of his discretion under s 34 as to whether he should serve a notice, by his failing to have regard to relevant considerations. Counsel for the plaintiff referred to the letter from the plaintiff’s solicitors to the Commissioner dated 7 October 2004 and to the reply from the Commissioner dated 19 October 2004, to which I have already referred.

40 It is true that in his letter of 19 October the Commissioner did not specifically respond to all of the contentions of the plaintiff’s solicitors in the letter of 7 October. However, I would not infer that the Commissioner had omitted to take those matters into account in deciding whether to serve a notice to show cause. In my opinion, the Commissioner was concerned in his letter of 19 October to state the reasons why, notwithstanding the matters which had been advanced by the solicitors for the plaintiff, he had decided to serve a notice to show cause on the plaintiff.

41 A further submission made by counsel for the plaintiff was based on the decision of Needham J in Brown v Corporate Affairs Commission (NSW) (1989)14 ACLR 781. Brown was a solicitor and was a director of a number of companies which had gone into liquidation, leaving no assets but substantial taxation liabilities. He was charged with offences under the Crimes Act 1914 (Commonwealth) as being a party to an alleged conspiracy to defraud the Commonwealth.

42 Brown was required by a notice issued by the Corporate Affairs Commission of New South Wales to show cause why a notice pursuant to section 562A(3) of the Companies Code (NSW) should not be served, prohibiting him from being involved in the management of a corporation for up to five years. Brown sought orders restraining the Corporate Affairs Commission from proceeding further. Brown sought this relief on three alternative bases, two of which were rejected by Needham J and which were, in any event, irrelevant for present purposes.

43 The third ground on which relief was sought in Brown was that the pendency of the criminal proceedings required, in the particular circumstances of the case, that the proceedings under the Companies Code be stayed until completion of the criminal trial. In reply to this ground it was submitted on behalf of the Corporate Affairs Commission that any hearing pursuant to the Companies Code, which would take place in accordance with the National Companies and Securities Commission (State Provisions Act), could take place in private, and that there was no necessity for Brown to give oral evidence, and that if he did give evidence, he could, by the making of an objection, prevent such evidence as he gave from being used against him in subsequent proceedings.

44 Needham J concluded that none of the points taken by the Corporate Affairs Commission was conclusive. His Honour referred to Hammond v The Commonwealth of Australia (1982) 152 CLR 188, especially per Gibbs CJ at 198 (and see also Dean J at 206).

45 Needham J then referred to Dwyer v National Companies & Securities Commission (1988) 13 ACLR 716, a decision of Waddell CJ in Eq, in which Waddell CJ in Eq had held that procedures under s 562A of the Companies Code should be equated to civil proceedings in cases where civil and criminal proceedings in respect of the same subject matter are pending. Needham J said he was unable to agree with the view of Waddell CJ in Eq that proceedings under s 562A of the Companies Code ought to be considered as “ordinary civil adversarial litigation”.

46 Needham J concluded he should make an order that the Corporate Affairs Commission be restrained from proceeding further until the final determination of the criminal charges.

47 I was informed by counsel that neither Brown nor Dwyer had been relevantly referred to in any subsequent case. Counsel for the plaintiff submitted that I should follow Brown, as being the later decision in which the earlier decision had been considered and expressly not followed.

48 It seems to me that a sufficient ground of distinction of the present case from the decision in Brown is that in Brown there was no statutory provision corresponding to the concluding words of section 34(1)(c ) of the Act.

49 Moreover, the National Companies and Securities Commission (State Provisions) Act enacted a much more elaborate procedure than the Act (the Pawnbrokers & Second-hand Dealers Act 1996) does in ss 34, 35 and 36. The National Companies and Securities Commission (State Provisions) Act provided that the Commission could hold a hearing for the purpose of performing one of its functions (s 7), conferred a power to summon witnesses to give evidence at such a hearing (s 8), regulated procedure at such a hearing (s 9) and imposed obligations on persons summoned to attend and give evidence at such a hearing (s 10).

50 In my opinion, Brown is distinguishable from the present case.

51 Having rejected the arguments of counsel for the plaintiff, I consider that the plaintiff’s claim for a final injunction should be dismissed.

52 I have been informed by counsel representing the Commissioner that the matter can proceed on the basis that the notice to show cause which has been served should be deemed to have been served today and that time for answering the notice should be regarded as running from today. Twenty-one days from today is to be allowed in which to respond to the notice to show cause.

53 I order that the plaintiff pay the defendant’s costs.

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Citations

Brisbane Loan Office P/L v The Commissioner for Fair Trading [2005] NSWSC 208

Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

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Helicopter Resources Pty Ltd v Commonwealth of Australia (No 2) [2018] FCA 991

Hammond v The Commonwealth [1982] HCA 42

CITATION:	Brisbane Loan Office P/L v The Commissioner for Fair Trading [2005] NSWSC 208
HEARING DATE(S):	09/03/05
JUDGMENT DATE :	9 March 2005
JUDGMENT OF:	James J at 1
DECISION:	The plaintiff's claim for a final injunction is dismissed

CATCHWORDS:	PRACTICE AND PROCEDURE - stay of proceedings - notice to show cause pursuant to s 34 of the Pawnbrokers and Second-hand Dealers Act 1996 ("the Act") - alleged breaches of the Act by plaintiff - criminal proceedings pending against an officer and an employee of the plaintiff for breaches of the Act - whether the Commissioner for Fair Trading should be restrained from acting on the notice to show cause until the criminal proceedings are finally determined - WORDS AND PHRASES - prosecuted
LEGISLATION CITED:	Companies Code (NSW) Crimes Act (NSW) Crimes Act 1914 (Commonwealth) National Companies and Securities Commission (State Provisions) Act (NSW) Passports Act (Commonwealth) Pawnbrokers and Second-hand Dealers Act 1996 (NSW) Pawnbrokers and Second Hand Dealers Regulation 2003 (NSW)
CASES CITED:	Brown v Corporate Affairs Commission (NSW) (1989) 14 ACLR 781 Dwyer v National Companies & Securities Commission (1988) 13 ACLR 716 Hammond v The Commonwealth of Australia (1982) 152 CLR 188
PARTIES:	Brisband Loan Office Pty Limited v TheCommissioner for Fair Trading
FILE NUMBER(S):	SC 30098/04
COUNSEL:	N Perram - Plaintiff Ms R Henderson - Defendant
SOLICITORS:	Henry Davis York C Pacey - Legal Service Division