Commissioner for Consumer Affairs v Hurst - [2008] SADC 119

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
In the Matter of SECURITY & INVESTIGATION AGENTS ACT 1995
COMMISSIONER FOR CONSUMER AFFAIRS v HURST
[2008] SADC 119
Judgment of Her Honour Judge Trenorden, Assessor Ms J Hutchinson and Assessor Mr H Klavins
26 September 2008
PROFESSIONS AND TRADES - OTHER PROFESSIONS, TRADES OR CALLINGS - LICENSING OF PARTICULAR TRADES OR CALLINGS - DEALERS
Security and Investigation Agents Act 1995 - Licence held - Criminal offence committed - Conviction while holding licence - Failure to notify fact of conviction - Application to cancel licences - Whether respondent dishonest in annual returns - Public expectations.
HELD: Licence cancelled. No fine imposed.
Security and Investigations Agents Act 1995; Security and Investigations Agents Regulations 1996; Controlled Substances Act 1984; Criminal Law (Sentencing) Act 1988, referred to.
Commissioner for Consumer Affairs v Sollars [2001] SASC 110; De Freitas v Commercial Tribunal 1416 of 1989, judgment delivered 1 December 1989, considered.

COMMISSIONER FOR CONSUMER AFFAIRS v HURST
[2008] SADC 119
THE COURT DELIVERED THE FOLLOWING JUDGMENT:

The respondent, Mr John Hurst, has held a security agents licence endorsed “security agent restricted to guard work as an employee” under the Security and Investigation Agents Act 1995 (the Act) since 10 July 2000. Further endorsements in relation to work functions of “security agent restricted to crowd control work as an employee” and “security agent restricted to canine handling as an employee” were added to Mr Hurst’s licence from 20 February 2004.
On 15 February 2008, the complainant, the Commissioner for Consumer Affairs (the Commissioner), filed a complaint in this Court alleging that there is proper cause for disciplinary action against Mr Hurst, on three counts.
These are based on the allegation that Mr Hurst was convicted on 20 August 2002 of one count of producing a controlled substance contrary to s 32(1)(a) of the Controlled Substances Act 1984, which being an offence referred to in s 9(1)(b) of the Act means that Mr Hurst would not be entitled to be granted a licence if he were now to apply.
Grounds two and three of the complaint are that Mr Hurst acted contrary to the Act in the course of performing functions as an agent, in that he had failed to disclose that he had been charged and subsequently convicted of a criminal offence, in relevant annual returns required under the Act, and thus had made a false or misleading statement in a material particular by omission, contrary to s 37 of the Act.
The full particulars of the complaint alleging that “there is proper cause of [sic] disciplinary action against Mr Hurst” are set out below:
1.    Events have occurred such that the defendant would not be entitled to be granted a licence as a security and investigation agent if he were to apply for a licence.
Sections 9(1)(b) and 25(1)(e)(ii) of the Security and Investigation Agents Act, 1995 (“the Act”).
Particulars
1.1The defendant holds, and at all relevant times had held, a security and investigation agents licence, ISL 164311, pursuant to the provisions of the Act.
1.2On 20 August 2002, the defendant was convicted in the District Court of South Australia on one count of producing a controlled substance contrary to Section 32(1)(a) of the Controlled Substances Act, 1984.
1.3By virtue of the conviction for the offence referred to in particular 1.2 above, the defendant would not be entitled to be granted a licence were he to apply. Regulation 5 of the Security and Investigation Agents Regulations, 1996.
1.4By virtue of the conviction for the offence referred to in particular 1.2 above, the defendant is not a fit and proper person to hold a licence.
2.    The defendant acted contrary to the Security and Investigation Agents Act, 1995 in the course of performing functions as an agent.
Sections 25(1)(b), 12(2)(b) and 37 of the Security and Investigation Agents Act, 1995 (“the Act”).
Particulars
2.1The defendant holds, and at all relevant times has held, a Security and Investigation Agents Licence [sic], ISL 164311, pursuant to the provisions of the Act.
2.2On 4 March 2002 the defendant was charged with producing cannabis, a prohibited substance contrary to s32(1)(a) of the Controlled Substances Act 1984 and summonsed to appear in the Magistrates Court sitting at Elizabeth on 24 April 2002.
2.3Pursuant to s12(2)(b) of the Act the defendant was required to lodge an annual return in May 2002. The annual return required the defendant to advise if he had been convicted of or charged with a criminal offence since the last licence renewal.
2.4The defendant lodged an annual return on 31 May 2002 and failed to disclose that he had been charged with the offence referred to in particular 2.2.
2.5By failing to disclose the charge referred to in particular 2.2 the defendant made a false or misleading statement in a material particular by omission, contrary to section 37 of the Act.
3.    The defendant acted contrary to the Security and Investigation Agents Act, 1995 in the course of performing functions as an agent.
Sections 25(1)(b), 12(2)(b) and 37 of the Security and Investigation Agents Act, 1995 (“the Act”).
Particulars
3.1The defendant holds, and at all relevant times has held, a Security and Investigation Agents Licence [sic], ISL 164311, pursuant to the provisions in the Act.
3.2On 20 August 2002, the defendant was convicted in the District Court of South Australia of one count of producing a controlled substance contrary to section 32(1)(a) of the Controlled Substances Act, 1984.
3.3Pursuant to s12(2)(b) of the Act the defendant was required to lodge an annual return in June 2003. The annual return required the defendant to advise if he had been convicted of or charged with a criminal offence since he lodged his last return.
3.4The defendant lodged an annual return in June 2003 and did not disclose the conviction referred to in particular 3.2 above.
3.5By failing to disclose the conviction referred to in particular 3.2 the defendant made a false or misleading statement in a material particular by omission, contrary to section 37 of the Act.
The Law
The Security and Investigation Agents Act 1995 requires persons acting as security and investigation agents to be licensed and regulates their activities in the public interest including providing for disciplinary measures. Thus, a person must be licensed before they can carry on business or otherwise act as a security agent or an investigation agent: s 6.
What is required in a licence application is set out in s 8 of the Act. A person is entitled to be granted a licence if he or she meets the criteria set out in s 9(1), but since 8 December 2005, that is subject to the provisions of s 9A. Thus, a natural person is entitled to be granted a licence if they meet the criteria in s 9(1) of the Act, but if they fail to meet one of those criteria, they do not have an entitlement. Section 9A sets out matters that the Commissioner must take into consideration in determining whether a person fits the criterion in s 9(1) of being a fit and proper person to be the holder of a licence. In addition, s 9A requires the Commissioner to take into consideration the grounds of any objection made by the Commissioner of Police to an application for a security agent’s licence, when assessing that application.
The conclusion that can be drawn from the provisions of s 9 and s 9A of the Act is that if a person has been convicted of an offence of the relevant class (see s 9(1)(b) and Clause 1, Schedule 1 of the Security and Investigation Agents Regulations 1996) that person will not have an entitlement to a licence for which he or she has applied. If an applicant has been shown to be dishonest, that person is unlikely to be entitled to a licence, by reason of not being a fit and proper person (sections 9(1)(d) and 9A).
Once a person is licensed, the licence remains in force until it is surrendered or cancelled or the licensed agent dies: s 12(1). However, a licensed agent is required to pay an annual fee to the Commissioner and to lodge with the Commissioner, annually, a return, in the manner and form required by the Commissioner: s 12(2).
Part 4 of the Act is concerned with disciplinary action with regard to holders of licences. According to s 25 of the Act, there is proper cause for disciplinary action against a person licensed as an agent if events have occurred such that the agent would not be entitled to be granted the licence if he or she were to apply for it: see s 25(1)(e)(ii).
Disciplinary Action
Proceedings for disciplinary action are commenced with the lodgement of a complaint in this Court: s 26. The Court may conduct a hearing to determine whether the matters alleged in the complaint constitute grounds for disciplinary action: s 27. In determining whether there is proper cause, regard may be had by the Court to such evidence of the conduct as the Court considers relevant.
The powers of the Court, if it is satisfied on the balance of probabilities, that there is proper cause for taking disciplinary action, are set out in s 29. Where a person the subject of the complaint is presently licensed as an agent, the Court may, in accordance with s 29(1)(c), do any of the following:
29—Disciplinary action
…
(c)   in the case of a person who is licensed as an agent—
(i)    impose conditions or further conditions on the licence;
(ii)     suspend the licence for a specified period or until the fulfilment of stipulated conditions or until further order;
(iii)    cancel the licence;
…
In addition, a fine not exceeding $20, 000 may be imposed: s 29(1)(b).
Offences
Section 37, in part, establishes that it is an offence for a person to make a statement that is false or misleading in a material particular (whether by reason of the inclusion or omission of any particular), in any information provided under the Act. The maximum penalty for such an offence is expressed to be $10,000 in the event that the statement was made in the knowledge that it was false or misleading, or in any other case, $2,500. There is a general defence allowed by s 40 of the Act to a charge of an offence against the Act. If the defendant proves that the offence was not committed intentionally and did not result from any failure on his or her part to take reasonable care to avoid the commission of the offence, that is a sufficient defence.
Proceedings for an offence are required to be commenced within 2 years of the date on which the offence is alleged to have been committed, or with the authorisation of the Minister, within 5 years: s 44(1)(b). Those time limits apply to offences other than expiable offences.
Section 23G – Cancellation of Licence
The Court’s attention was also drawn to s 23G of the Act, a provision which came into effect on 8 December 2005. That section provides that where the holder of a security agents licence is found guilty of an offence of a particular class, the licence is automatically cancelled. However, the Court’s attention was drawn to this provision really to indicate the seriousness with which Parliament views the commission of offences within the specified class by holders of security agents licences. It does not apply in this case.
The Facts
Mr Hurst has held a licence as a “security agent restricted to guard work as an employee” since 10 July 2000. His licence has been renewed annually since that time. In February 2004, Mr Hurst applied to have the conditions of his licence varied. The functions of crowd control work and canine handling (in both cases as an employee) were endorsed on his licence, thus enlarging the work he was licensed to carry out under the Act.
A Statement of Agreed Facts was provided to the Court. Mr Hurst was charged upon information with an offence against s 32(1)(a) of the Controlled Substances Act 1984 on 4 March 2002 and first appeared in answer to the summons, in the Elizabeth Magistrates Court, on 20 April 2002. Mr Hurst entered a guilty plea to the charge of the indictable offence, on 3 July 2002, was committed to the District Court for sentencing where he was arraigned on the 12 August 2002 and sentenced on 20 August 2002. The Certificate of Record of the District Court of South Australia shows that Mr Hurst was convicted and fined.
The following are facts agreed by Mr Hurst and the Commissioner for Consumer Affairs:
On 12 June 2003, the defendant lodged his annual return with the complainant. The annual return asked the defendant to tick a box: “If you have any information to disclose”. This included whether the defendant “had been convicted of, or charged with a criminal offence, (other than a minor traffic offence)” since the last renewal. The defendant was required to provide full details if he had. The defendant did not tick the disclosure box and did not provide any details that he had been convicted of producing cannabis.
On 30 January 2004, the defendant lodged an application with the complainant to change his licence conditions as a security agent. The application asked: “Have you ever been convicted of any offence, (other than a traffic offence) or are there any court proceedings pending?” The defendant answered no and did not disclose that he had been convicted of producing cannabis.
On 20 February 2004, the defendant’s security agents licence was endorsed with further work functions of ‘security agent restricted to crowd control work as an employee’ and ‘security agent restricted to canine handling as an employee’ pursuant to the provisions of the Security and Investigation Agents Act 1995.
On 10 June 2004, the defendant lodged his annual return with the complainant. The annual return asked the defendant to tick a box: “If you have any information to disclose”. This included whether the defendant “had been convicted of, or charged with a criminal offence, (other than a minor traffic offence)” since the last renewal. The defendant was required to provide full details if he had. The defendant did not tick the disclosure box as he had nothing to disclose since his last renewal.
On 15 June 2005, the defendant lodged his annual return with the complainant. The annual return asked the defendant to tick a box: “If you have any information to disclose”. This included whether the defendant “had been convicted of, or charged with a criminal offence, (other than a minor traffic offence)” since the last renewal. The defendant was required to provide full details if he had. The defendant did not tick the disclosure box as he had nothing to disclose since his last renewal.
In addition to the usual annual return, the defendant was required to complete a Personal Information Declaration Form as part of his return for 2006. On 19 June 2006 the defendant completed the Personal Information Declaration form. The form asked the defendant: “Whether he had ever been arrested or reported for ANY offence …, whether or not a conviction was recorded”. The defendant answered yes and relevantly provided the following details: “Sorry about the lack of detail, for I am unsure about the offences or dates listed below South Australia. Fined $750 – but not sure of the year, no conviction”.
Following receipt of this information the complainant requested details of these alleged prior offences from South Australia Police.
On 27 June 2006, the defendant lodged his annual return with the complainant. The annual return asked the defendant to tick a box: “If you have any information to disclose”. This included whether the defendant “had been convicted of, or charged with a criminal offence, (other than a minor traffic offence)” since the last renewal. The defendant was required to provide full details if he had. The defendant did not tick the disclosure box as he had nothing to disclose since his last renewal.
On 22 June 2007, the defendant lodged his annual return with the complainant. The annual return asked the defendant to tick a box: “If you have any information to disclose”. This included whether the defendant “had been convicted of, or charged with a criminal offence, (other than a minor traffic offence)” since the last renewal. The defendant was required to provide full details if he had. The defendant did not tick the disclosure box as he had nothing to disclose since his last renewal.
The Appellant’s Submissions
Mr Hurst apologised to the Commissioner and informed the Court that his honesty in completing the return in 2006 where he acknowledged the offence, was the reason that the Commissioner undertook investigations, which led directly to the issue of the complaint and these proceedings. Mr Hurst said that the Court proceedings in relation to the indictable offence charged in 2002 took a long time and that he believed the Commissioner had been informed of those proceedings or their outcome.
It is apparent from the agreed facts that Mr Hurst did not mean that he informed the Commissioner of his offence in the usual annual return 2006. He did so in the Personal Information Declaration Form that he was required to complete in addition to the annual return, in 2006.
Mr Hurst was quite willing to relinquish his licence as a security agent undertaking crowd control work (as an employee) and canine handling (as an employee), but did not want to have cancelled his security agents licence restricted to guard work as an employee.
Mr Hurst has worked as a security guard now for 20 years. It is his sole source of income. He has financial commitments and tries to provide for his three children, who are not in his care. He claims to have a good reputation, has personal integrity and is honest. He submitted that he had not knowingly been dishonest in filling out the annual returns. He did not knowingly fail to disclose a conviction because he did not believe he had been convicted as he did not hear those words uttered by the judge.
The Commissioner’s Submissions
There is no doubt that the case for disciplinary action against Mr Hurst is made out. He has been convicted of a relevant offence and so would not be entitled to be granted a licence as a security and investigation agent if he were now to apply: s 9(1)(b) and Clause 1, Schedule 1 Security and Investigation Agents Regulations 1996. In addition, he is not entitled to be granted a licence were he to apply now, because he is not a fit and proper person to be the holder of a licence: s 9(1)(d) and s 9A(1). The latter conclusion is based on our finding, having regard to the agreed facts, that Mr Hurst was dishonest in the annual returns he provided to the Commissioner.
The Commissioner submitted that the appropriate order was a cancellation of Mr Hurst’s security agents licence and the imposition of a fine for the provision of a full statement to the commission contrary to s 37 of the Act.
Cancellation of the Licence
We are satisfied that there is proper cause for taking disciplinary action against Mr Hurst. That follows from the fact of an offence committed by Mr Hurst. If he were to apply for a security agents licence now he would clearly not be entitled to be granted the licence by reason of his conviction in 2002, the offence having occurred within the past 10 years.
Following the hearing, we reserved our decision in order to consider whether, on the authorities, it was open to us to adopt the course suggested by Mr Hurst, that is to cancel his licence in relation to crowd control and canine handling, but to leave in place the licence to work as a security agent restricted to guard work as an employee, or otherwise impose conditions on the licence.

We have considered whether we could suspend the licence for a period given the powers of the Court in s 29 of the Act. However, we have concluded on balance that this would not be appropriate. The purpose of disciplinary proceedings is the protection of the public: Commissioner for Consumer Affairs v Sollars [2001] SASC 110. The focus of disciplinary proceedings is on the protection of the public, as is the purpose of the statutory scheme in the Act. The public is entitled to have confidence in the standards and integrity of those employed in the security industry. Parliament has sought to ensure that the public can have that confidence through the provisions it has enacted as part of the Act. It is important therefore that public confidence in the integrity of security agents be maintained.
It follows that we do not consider it appropriate to suspend Mr Hurst’s licence or allow him to retain his licence, with the two endorsements added in 2004 in relation to crowd control and canine handling, deleted. There is no alternative, as we see it, but that his licence should be cancelled.
The Imposition of a Fine
Mr Hurst claims not to have realised that he had been convicted, until recently. His story has been consistent, at least since 2006 when he completed the Personal Information Declaration Form. In that form he claimed that no conviction was recorded. His evidence was that he did not realise until recently, that he had been convicted in 2002. We accept his evidence.
From the transcript of proceedings in the District Court, it appears that the words, “you are convicted”, were not uttered by the sentencing judge. This does not matter. Once an accused person has pleaded or been found guilty to a crime, conviction is complete and sentence follows, unless the Court exercises the exceptional power not to convict, that resides in sections 15 and 16 of the Criminal Law (Sentencing) Act 1988. Of course, the sentencing judge can only exercise one of these powers if he or she has first found the existence of the conditions precedent to the exercise of that power, set out in those sections.
It is not intended that the consequences of disciplinary proceedings operate as a punishment for Mr Hurst or anyone else who is the subject of a complaint brought by the Commissioner: Commissioner for Consumer Affairs v Sollars (above). The Commissioner sought a fine, in addition to the cancellation of Mr Hurst’s licence. We were concerned that, as an additional disciplinary measure, this might have the appearance of punishment of Mr Hurst in circumstances where it was too late to bring proceedings against him for an offence under the Act, having regard to the time limits for the bringing of proceedings.
By arrangement, following the conclusion of the hearing, the solicitors for the Commissioner provided some authorities to the Court on this point. One of the authorities provided to the Court was the judgment of the Full Court of the Supreme Court in De Freitas v Commercial Tribunal (1416 of 1989; judgment delivered 1 December 1989). In De Freitas, the Full Court made clear that disciplinary proceedings are not proceedings for an offence against an Act and that the time limit in relation to the bringing of proceedings for the charge of an offence does not apply to disciplinary proceedings. The Act in question was the Land Agents Brokers and Valuers Act 1973, but it would appear that the same could be said under the Act here under consideration. We accept that disciplinary proceedings are separate from proceedings charging an offence against the Act.
Another matter which concerned the Court was that of Mr Hurst’s defence that he did not knowingly act dishonestly in filling out the annual returns between 2002 and 2006. The Act, in s 40 provides a general defence to a charge of an offence if the defendant can prove that the offence was not committed intentionally and did not result from any failure on the part of the defendant to take reasonable care to avoid the commission of the offence. However, disciplinary proceedings do not constitute a charge of an offence. The defence in s 40 does not apply to disciplinary proceedings but it is open to the Court to consider all relevant matters.
We have accepted that Mr Hurst honestly believed that he had not been convicted. However, in 2003 (and every year thereafter), Mr Hurst in his annual return had failed to tick the box indicating that he had been charged with a criminal offence since his licence was last renewed. It appears to us that Mr Hurst’s failure extended from a misunderstanding of what was sought in the annual return, rather than an omission reflecting an intention to deceive the Commissioner. We consider that this conclusion is borne out by the fact that when required to complete the Personal Information Declaration Form in 2006, where a clear and specific question was asked, Mr Hurst answered honestly and with as much detail as he could muster. We note also that the form of the annual return has apparently been redrafted.
We are satisfied that Mr Hurst did act contrary to the Act in failing to disclose in the annual returns between 2002 and 2007 that he had been charged with or convicted of the offence with which he was charged and convicted in 2002. In the exercise of our discretion, we take into account our finding that this contravention, by omission to tick the relevant box, and thence to provide the relevant information, was not a deliberate intention to deceive. It is open to us to consider in disciplinary proceedings, all relevant matters.
In all of the circumstances, we are not satisfied that there is proper cause for taking disciplinary action against Mr Hurst in relation to counts 2 and 3 in the complaint. No fine will be imposed.
Concluding Remarks
We have no reason to doubt Mr Hurst’s personal integrity and reputation. On the other hand, we are obliged, in the public interest, to observe that the Act does not countenance the issue of a licence to a person who has been convicted within the recent past, of the kind of offence of which Mr Hurst was convicted in 2002. If Mr Hurst had been convicted after 8 December 2005, his licence would have been cancelled automatically, without the intervention even of this Court.
Mr Hurst has not been disqualified from holding a licence. Thus, there does not appear presently to be any reason to prevent him applying for a licence again, after 10 years have passed since the 2002 conviction.
Orders
There will be an order, pursuant to our powers under s 29(1)(c)(iii) of the Act that Mr Hurst’s security and investigation agents licence, ISL 164311, is cancelled.