Commissioner for Consumer Affairs v Brenton Evan Hounslow
[2009] SADC 114
•23 October 2009
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
COMMISSIONER FOR CONSUMER AFFAIRS v BRENTON EVAN HOUNSLOW
[2009] SADC 114
Reasons for Decision of Her Honour Judge McIntyre
23 October 2009
ADMINISTRATIVE LAW
Disciplinary proceedings brought under the Second-Hand Vehicle Dealers Act 1995 against second-hand motor vehicle dealer both in his own right and as sole director of a licensed body corporate - improper conduct on the part of the dealer and the body corporate established - dealer disqualified from being licensed under the Act until further order and dealer further prohibited from being employed or otherwise engaged in the business of a dealer and from being a director or having an interest in a body corporate that is a dealer until further order.
Second Hand Vehicle Dealers Act 1995 s27, s27(1)(c), (d) and (h), referred to.
Commissioner for Consumer Affairs v Sollars (2001) 79 SASR, considered.
COMMISSIONER FOR CONSUMER AFFAIRS v BRENTON EVAN HOUNSLOW
[2009] SADC 114
Brenton Evan Hounslow was the sole director of Docteur Desmo Australia Pty Ltd, which operated a business selling motorcycles on consignment for individual consumers.
The Commissioner for Consumer Affairs makes complaint that there is proper cause for disciplinary action against Mr Hounslow under the provisions of the Second Hand Vehicle Dealers Act 1995 (“the Act”).
At the heart of the complaint are allegations that both Mr Hounslow and Docteur Desmo acted improperly in the course of conducting business as a dealer because they failed to account to the owners for the proceeds of the sale of various motorcycles left on consignment. There are other issues arising from the conduct of the business and Mr Hounslow’s activities.
Issues
·Whether, on the balance of probabilities, there is proper cause for taking disciplinary action against Mr Hounslow? And, if there is
·What are the proper orders to be made?
Background
Mr Hounslow was the sole director and company secretary of Docteur Desmo Australia Pty Ltd. between 28 August 2001 and 28 August 2007. Docteur Desmo was wound up by order of the Federal Court of Australia on the 14th November 2007.
Docteur Desmo was registered as a licensed dealer under the Act from 9 October 2001 until 5 February 2008. There were some periods of suspension of that registration for failure to pay the required compensation fund contribution however those periods are not relevant for present purposes.
Mr Hounslow was registered as the holder of a second-hand vehicle dealer’s licence authorised to act as a manager for a licensed dealer from 7 February 1997 until 11 February 2006.
The matters alleged in the complaint commenced on 13 January 2006.
This complaint first came before the court on 12 August 2009. Mr Hounslow attended in person and the matter was adjourned 2 September 2009 to enable him to obtain legal advice. Mr Hounslow did not attend on the next occasion. The matter was adjourned to a directions hearing on 12 October 2009. Mr Hounslow was notified of the directions hearing date and the orders made. He did not attend on 12 October 2009. The matter was listed for hearing on 21 October 2009. The Commissioner notified Mr Hounslow of that hearing date. Mr Hounslow again failed to attend Court. I was satisfied that he had notice of the hearing and determined to proceed with the hearing under s29 of the Act in his absence.
The Complaint
I must consider whether there is proper cause for disciplinary action against Mr Hounslow in the context of section 27 of the Act and specifically section 27(1)(c), (d) and (h). Section 27(2) of the Act is also relevant. It provides that disciplinary action may be taken against each director of a body corporate that is a dealer if there is proper cause for disciplinary action against the body corporate.
I will now proceed to deal with each of the counts on the complaint.
Count 1
Count one alleges that there is proper cause for disciplinary action under s27(1)(c) of the Act on the basis that Mr Hounslow was a director of Docteur Desmo and that Docteur Desmo has acted improperly in the course of conducting his business as a dealer. I am satisfied that Mr Hounslow was a director of Docteur Desmo at all relevant times.
Count 1 alleges improper dealing on the part of the company in respect of 6 customers who left their motorcycles with Docteur Desmo for sale on consignment. I am satisfied that the Commissioner has established all of the particulars in paragraphs 1.3, 1.4, 1.6, 1.7 and 1.8 on the balance of probabilities.
I am also satisfied of particulars 1.5.1, 1.5.2, 1.5.5 and 1.5.6 relating to a transaction involving Mark McWilliams. I am further satisfied that Docteur Desmo provided Mr McWilliams with $1,500 as alleged in paragraph 1.5.3. I do not have sufficient evidence of the allegations outlined in paragraphs 1.5.3 and 1.5.4 concerning “the other motorcycle” to be satisfied of those allegations.
Notwithstanding that the Commissioner failed to establish the allegations concerning “the other motorcycle”, I am satisfied that on the basis of the particulars that I have found proven Docteur Desmo’s conduct was improper within the meaning of s27(1)(c). Accordingly, Mr Hounslow is liable under s27(2) of the Act.
Counts 2, 3 and 4
Counts 2, 3 and 4 relate to Mr Hounslow’s dealings on his own account. Having considered the evidence presented to me I am satisfied that all of the particulars set out in counts 2,3 and 4 have been proven on the balance of probabilities. Accordingly I am further satisfied that Mr Hounslow has acted improperly in the course of conducting his business as a dealer contrary to s27(1)(c) of the Act.
Count 5
Count 5 alleges that events have occurred such that Mr Hounslow would not be entitled to be licensed as a dealer if he were to apply for a licence. I am satisfied that the Commissioner has proven the particulars set out in count 5. Further I am satisfied that, by reason of those matters, Mr Hounslow would not be entitled to be licensed as a dealer if he were to apply for a licence by reason of the provisions of s9(1)(b)(d)(e) & (f) of the Act.
Disciplinary Action
I am satisfied on the balance of probabilities as outlined above that there is proper cause for taking disciplinary action against Mr Hounslow. The orders that may be made are set out in s31 of the Act. In exercising the power to make orders in disciplinary proceedings the protection of the public is paramount.[1]
[1] Commissioner for Consumer Affairs v Sollars (2001) 79 SASR
This was a repeated and sustained course of conduct involving a number of consumers. The breaches were not accidental or inadvertent. In consequence of Mr Hounslow’s actions at least 9 consumers have been required to make claims for compensation under schedule 3 to the Act from the Second Hand Vehicles Compensation Fund. Orders made against the Compensation Fund total in excess of $100,000. Clearly those consumers are likely to have suffered significant distress and considerable inconvenience as a result of Mr Hounslow’s actions and those of the company for which he was responsible. It is my view that Mr Hounslow’s flagrant breach of his obligations under the Act on a number of occasions leads inevitably to the conclusion that measures should be taken, in the interest of community protection, to prevent him from being in a position to commit further breaches.
I will therefore make orders as follows:
1. That until further order Brenton Evan Hounslow be:
(a) Disqualified from being licensed under the Act; and
(b) Prohibited from being employed or otherwise engaged in the business of a dealer; and
(c) Prohibited from being a director or having an interest in a body corporate that is a dealer.
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