Commissioner for Consumer Affairs v Martinez-Diaz - [2008] SADC 131

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
COMMISSIONER FOR CONSUMER AFFAIRS v MARTINEZ-DIAZ
[2008] SADC 131
Reasons for Decision of His Honour Judge Nicholson
14 October 2008
PROFESSIONS AND TRADES - OTHER PROFESSIONS, TRADES OR CALLINGS - LICENSING OF PARTICULAR TRADES OR CALLINGS
Respondent holder of licence under Security and Investigation Agents Act. Complainant alleging proper cause exists for disciplinary action on the basis that respondent convicted of a prescribed offence and that respondent not a fit and proper person to hold a licence. Order cancelling licence.
Security and Investigation Agents Act 1995 ss9, 25-29; Security and Investigation Agents Regulations 1996 reg 5, sch 1; Criminal Law Consolidation Act 1935 Part 5; Workers Rehabilitation and Compensation Act 1996 s120(1)(a), referred to.
Commissioner for Consumer Affairs v Standley (1998) 71 SASR 152; Carusi v Police [2002] SASC 240; Commissioner for Consumer Affairs v Sollars [2001] SASC 110; Commissioner for Consumer Affairs v Leonello [2005] SADC 134; Commissioner for Consumer Affairs v Tedesco [2005] SADC 79; Commissioner for Consumer Affairs v Stamoulis [2002] SADC 101; Commissioner for Consumer Affairs v Moore-McQuillan [2004] SADC 60; Commissioner for Consumer Affairs v Titcomb [2008] SADC 80; Commissioner for Consumer Affairs v Jurjevic [2006] SADC 65; Commissioner for Consumer Affairs v Boynton [2000] SADC 106; Commissioner for Consumer Affairs v Storoszczuk [2006] SADC 20, considered.

COMMISSIONER FOR CONSUMER AFFAIRS v MARTINEZ-DIAZ
[2008] SADC 131
The complaint

On 23 January 2008, the Commissioner for Consumer Affairs (“the Commissioner”) lodged a Complaint, pursuant to s26 of the Security and Investigation Agents Act 1995 (“the Act”), alleging that there existed proper cause for disciplinary action against the respondent, to whom I will refer, throughout these reasons, as either the respondent or Mr Martinez-Diaz. The Complaint alleged the following:
“1.Events have occurred such that the defendant [sic] 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 Act].
Particulars
1.1The defendant [sic] holds and at all relevant times has held, a security and investigations licence, ISL 165513, pursuant to the provisions of the Act.
1.2On 25 February 2004, the defendant [sic] was convicted in the Magistrates Court of South Australia of two counts of larceny and four counts of theft contrary to ss131 and 134 of the Criminal Law Consolidation Act 1935 respectively.
1.3Those offences were committed by the defendant [sic] during the course of his employment as a security officer for Advent Security.
1.4By virtue of the convictions for the offences referred to in particular 1.2 above, the defendant [sic] would not be entitled to be granted a licence were he to apply: Regulation 5 of the Security and Investigations Agents Regulations 1996.
On the day of the hearing, the Commissioner sought permission to amend the Complaint and counsel for the respondent raised no objection. Consequently, permission was granted to amend the original Complaint,[1] and the following two paragraphs were added:
1.5On ten occasions, between the 24th of January 2006 and the 15th of March 2007, the defendant [sic] recklessly made a false statement contrary to ss212 and 217 of the Social Security (Administration) Act 1999 resulting in the defendant [sic] being paid $3,177.75 by Centrelink to which he was not entitled. The defendant [sic] was convicted of the offences.
1.6By virtue of the offences referred to in particular 1.5 above, the defendant [sic] would not be entitled to be granted a licence were he to apply, as the offences are Commonwealth offences and substantially similar to dishonesty offences contained within Part 5 of the Criminal Law Consolidation Act 1935: Regulation 5 and Schedule 1(3)(b) of the Security and Investigation Agents Regulations 1996.”
[1] Transcript, p9
Factual Background
The respondent gave evidence. He provided the Court with some personal particulars. He stated that he was born in El Salvador and migrated to Australia as a refugee in 1991. The respondent attended school until year 12 but did not matriculate. He has been employed in a range of jobs including kitchen hand work, hospitality work and factory process work. He has worked in the security industry for a number of years. He lives with his mother who is quite unwell, makes a weekly contribution of $90 towards the rent, and assists with the payment of other bills. He also makes regular monthly contributions by way of sponsoring a child in Uganda.
The respondent has held a Security and Investigation Agent’s licence since 18 October 2000.[2] The licence is a restricted one. He is entitled to engage in guard work, crowd control work, selling and providing advice in relation to security systems and dog handling work. As at the date of the hearing he was employed by Auswide Protective Services for 40 hours per week as a static security guard monitoring a factory. He also had a part-time job on the weekends as a crowd controller. Mr Martinez-Diaz told the court that he is not qualified to undertake any other skilled occupation and that any cancellation of his licence would cause significant financial hardship including putting at risk the financial contributions he makes to the household and his sponsorship commitment.
[2] Exhibit P2
The respondent failed to disclose any criminal convictions to the Commissioner on his 2004 Security Licence Annual Return. Following legislative changes in 2005, all holders of a security licence became required to submit a form comprising a Personal Information Declaration (“PID”). Mr Martinez-Diaz submitted a PID on 17 November 2006 and disclosed a criminal conviction for the offence of larceny.[3] This was the first time that the Office of Consumer and Business Affairs (“OCBA”) was put on notice that the respondent had a criminal conviction. During an interview with OCBA officers on 20 November 2007, the respondent explained that he did not reveal his criminal convictions on his 2004 Annual Return because he thought he only had to include offences committed after a certain date.
[3] Exhibit P1
The offences
The respondent’s various convictions and the circumstances of the offences were not disputed by the respondent. The following summary sets out my findings in this respect. On 25 February 2004, he was convicted of two counts of larceny and four counts of theft at the Adelaide Magistrates Court.[4] These offences occurred while the respondent was working as a security officer for Advent Security at the National Pharmacies outlet located in Gawler Place, Adelaide. The respondent had been working approximately 19 hours each week at these premises and his duties included supervising the depositing of funds into a vault. He admitted that he took advantage of his position of trust on six separate occasions between 9 May 2003 and 5 December 2003 by stealing $2,108.25 cash in total. He was cooperative with police, made full and frank admissions and pleaded guilty to the offences. The respondent was sentenced to 3 months imprisonment, suspended upon entering into a bond to be of good behaviour for two years with conditions relating to supervision and drug and alcohol counselling. He was also ordered to pay compensation in the sum of $2,108.25 and court fees.
[4] Exhibit P3
As far as the Social Security charges are concerned, the respondent did not declare the full extent of his earnings between January 2006 and 15 March 2007 and whilst in receipt of a New Start allowance from Centrelink. During that period he was working casually at an Adelaide club as a security guard and earned $8,517.50 but declared only $2,019.50.[5] He therefore received benefits to which he would not have been entitled had he accurately declared his earnings. This offending was detected following comparisons made between records held respectively by Centrelink and the tax office.
[5] Exhibit P6
I find that with respect to both sets of offences Mr Martinez-Diaz has made substantial efforts towards achieving full restitution and that he has a measure of insight into the dishonesty of his past behaviour.
Grounds for Disciplinary Action
The Complainant submitted that the dishonesty offences for which the defendant was convicted in 2004 are offences of a class specified by Regulation 5 and Schedule 1(3)(a) of the Security and Investigation Agents Regulations because they are offences committed against Part 5 of the Criminal Law Consolidation Act within the last 5 years. It was further submitted that the Commonwealth offences in 2006-07 are substantially similar to offences falling within Part 5 of the Criminal Law Consolidation Act in that Part 5 deals with offences of dishonesty including theft and deception. As such, these offences also fall within regulation 5 and schedule 1(3)(b) of the Security and Investigation Agents Regulations. Counsel for the respondent did not argue against or challenge these submissions, put on behalf of the Commissioner, and I accept them, at least insofar as the convictions for larceny and theft in 2004 are concerned. I do not need to reach a final view on whether or not the Commonwealth offences fall within regulation 5 because I would reach the same ultimate conclusion in this matter even if these convictions had not been relied upon by the Commissioner.
The Act provides that a natural person is entitled to be granted a security agents licence provided that the person, inter alia, has not been convicted of an offence of a class specified by regulation in relation to the functions to be authorised by the licence[6]. Counsel for the Commissioner put to the Court that the offences for which the respondent was convicted would disentitle him from obtaining a security agents licence if he were now to apply for one.
[6] Section 9(1)(b)
The Complainant relies on the proposition established in the Commissioner for Consumer Affairs v Standley[7] that the Commissioner does not have any discretion to grant a licence in circumstances where an applicant has not satisfied one of the statutory requirements. In that case Doyle CJ observed,[8] in the context of the scheme set out in s9 of the Act:
I can find no reason to imply or to infer that the Commissioner has a discretion to grant a licence even though one or more of the statutory requirements is or are not satisfied. To so conclude would be to undermine the statutory scheme, in the sense that the Commissioner would be given power to by-pass requirements that Parliament has gone to the trouble of identifying.
[7] (1998) 71 SASR 152
[8] At 158
Given that a person is automatically precluded from being granted a licence under the Act upon conviction for a disqualifying offence, the Commissioner contends that there is proper cause for disciplinary action under s25(1)(e)(ii) of the Act in the present case and seeks the cancellation of the security licence held by the respondent.
Policy Considerations
The reason for such disciplinary action is said to arise from the need to protect the public by regulating who may engage in the activities for which a licence is required. Carusi v Police[9] concerned an appeal against a conviction and sentence of a security officer for assault occasioning actual bodily harm, Gray J stated[10] that:
“The Act's purpose is to ensure that only properly qualified and trained agents perform security duties. The legislative scheme ensures that members of the public are not exposed to a risk of injury at the hands of untrained, unqualified and unlicensed agents. This includes the proper control of the conduct of crowds on private premises. Unacceptable and improper conduct is guarded against. The legislation recognises that private security agents are in a position of authority. Like any public enforcer of rights, their conduct must be regulated so that misuse and abuse of power can be guarded against. This is an important consideration when considering the provisions of the Act in cases such as the present.”
[9] [2002] SASC 240
[10] At [30]
The policy behind the Act was earlier discussed in Commissioner for Consumer Affairs v Sollars,[11] where Doyle CJ noted[12] that:
the provisions of the Act relating to the grant of a licence indicate that Parliament is concerned to ensure that licensed persons have appropriate qualifications and experience to act as agents, and are fit and proper persons to be licensed.
The Chief Justice went on to point out[13] that the purpose of disciplinary proceedings is the protection of the public and not the punishment of the licence holder:
In my opinion the scheme of the Act is relevantly to protect the public by regulating who may engage in the activities for which a licence is required. The focus is on the protection of the public by requiring applicants to meet criteria directed to their qualifications, experience and fitness for the occupation.
. . . .
Although the consequences of the making of an order may appear to operate as a punishment for Mr Sollars, it needs to be understood that the order itself is not punitive in character, nor is the decision as to the order to be made to be reached by reference to considerations relevant to the sentencing of an offender.
[11] [2001] SASC 110
[12] At [13]
[13] At [14], [18]
It is apparent that key policy considerations of Parliament in this area relate to the need to protect the public and to maintain public confidence in the integrity of the security industry. This intention is expressed through a sophisticated and highly regulated statutory regime. The granting of a licence should be viewed as a privilege rather than a right, which is at risk of forfeiture through disciplinary actions.[14]
[14] Commissioner for Consumer Affairs v Leonello [2005] SADC 134
Powers of the Court
The Court has a broad jurisdiction under s25(1) to hear complaints for disciplinary proceedings against licensed agents brought pursuant to the provisions of Part 4 of the Act. Section 25(1)(e)(ii) of the Act provides that there is proper cause for disciplinary action against 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”. That is the position in the present case, given the convictions recorded against Mr Martinez-Diaz in 2004.
The court conducted a hearing on 13 June 2008, pursuant to s27 of the Act, for the purpose of determining whether the matters alleged in the complaint constituted grounds for disciplinary action. Each party was represented by counsel and the Court received documentary evidence as well as oral evidence given by Mr Martinez-Diaz under oath.
Section 28 of the Act provides that in any proceedings under Part 4, the Court will, if a Judge of the Court so determines, sit with assessors selected in accordance with Schedule 1. Neither party in the present case sought to be heard on this subject other than to indicate to the Court that they were content for the matter be heard by a Judge sitting alone without assessors. The matter therefore proceeded on this basis.[15]
[15] Transcript, p.2
I am satisfied, on the balance of probabilities, that there is proper cause for taking disciplinary action against Mr Martinez-Diaz. Section 29 sets out the range of disciplinary powers the Court may exercise. Possible orders include a reprimand; a fine not exceeding $20,000; the imposition of conditions on the licence; suspension of the licence for a specified period or until the fulfilment of stipulated conditions or until further order; and cancellation of the licence.
Cancellation
The view expressed in Commissioner for Consumer Affairs v Tedesco[16] was that where disentitling offences have occurred, the starting point is cancellation and only in exceptional circumstances should a court refrain from such a course of action. In that case the licence holder had been convicted of rape and sentenced to a lengthy term of imprisonment. The Court decided to cancel the licence on the following basis:[17]
We also approach the question of penalty from the position that a matter which would preclude a person from obtaining a licence in the first place should disentitle him from continuing to hold a licence unless his particular circumstances would justify a lesser penalty. … [I]t is only in exceptional circumstances that the Court should exercise its discretion not to cancel the licence.
[16] [2005] SADC 79
[17] At [8]
In Commissioner for Consumer Affairs v Stamoulis,[18] a licence was cancelled following a conviction for cannabis production. The Court expressed the view that:
In all those circumstances there is nothing to take his case out of what I would regard as the ordinary class which is that a person who would not be entitled to get a licence in the first place in any circumstances should not be entitled to continue to hold a licence if he commits a prescribed offence.
[18] [2002] SADC 101
Cancellation In Cases Concerning Offences of Dishonesty
I am not aware of a case in South Australia which has looked at larceny by a servant within the context of this Act. However, there have been cases which have considered offences involving dishonesty similar to the social security offending in this matter. In Commissioner for Consumer Affairs v Moore-McQuillan,[19] the Commissioner made an application to revoke a licence on the basis of convictions for common assault and six offences of obtaining payments by dishonest means, contrary to s120(1)(a) of the Workers Rehabilitation and Compensation Act 1996. In cancelling the licence, the Court expressed the view that the Commissioner’s allegations presented an unanswerable case against the respondent.
[19] [2004] SADC 60
Similarly, Commissioner for Consumer Affairs v Titcomb[20] concerned an application for the cancellation of a licence based on convictions for social security offences, as well as possession of cannabis and disorderly conduct matters. The Court came to the conclusion on the basis of the convictions that it was ‘inescapable that Mr Titcomb was not a fit and proper person to hold a licence’ and accordingly ordered that his licence be cancelled.
[20] [2008] SADC 80
Alternatives to Cancellation
Nevertheless, if the offending is relatively minor and there is an appropriate and workable remedy, courts have been prepared to consider options, other than cancellation, available under s29 of the Act. In Commissioner for Consumer Affairs v Leonello[21] the Court stated[22]:
In making the respective observations in both Stamoulis and Tedesco, we do not think the Court was laying down any exhaustive legal criterion of "exceptional circumstances", before an order for cancellation is to be made where a disentitling offence is committed after a licence is issued. That expression merely reflects the position that the Court is unlikely (sic) to make orders falling short of cancellation on relatively few occasions, following the commission of prescribed offences by licence holders under the S&IA Act. No such criterion or qualification appears in the Act, so it would be to place an unwarranted gloss on the statute to read it in that way.
The Court went on to say that the cases indicate that anything less than cancellation would only be exercised with respect to relatively minor breaches of the class of offences listed in s9(1)(b) of the Act. In Leonello, the respondent had been fined a total of $325 for the offences of producing and possessing cannabis and the Court found that a period of suspension for 12 months would best reflect an appropriate balance
between the findings of relatively minor offending committed by the respondent, as against the primary policy of public protection, and as an appropriate measure designed to reinforce the confidence of the public in the industry and in the administration of the S&IA Act itself.[23]
[21] [2005] SADC 134
[22] At [28]
[23] See also Commissioner for Consumer Affairs v Jurjevic [2006] SADC 65

Other examples of where the Court has exercised the discretion not to cancel a licence include Commissioner for Consumer Affairs v Boynton,[24] a case which involved a complaint following a conviction for assault occasioning actual bodily harm. Given the personal circumstances of Mr Boynton, specifically that unemployment would cause great financial hardship for his family, the licence terms were varied to prohibit him from being able to undertake specific types of work. In Commissioner for Consumer Affairs v Storoszczuk,[25] which concerned a failure to disclose four counts of common assault and one count of resisting police, the Court ordered that the licence terms be varied to prohibit the respondent from being able to undertake any form of crowd control work and, in addition, the licence was suspended for six months. This remedy was held to be appropriate as it would balance the need to “protect the public whilst enabling the respondent to maintain his employment in the long term”.
[24] [2000] SADC 103
[25] [2006] SADC 20
Decision
As I have already indicated, I am satisfied that there is proper cause for disciplinary action under s25(1) of the Act.
Counsel for the Commissioner highlighted the need to balance the personal circumstances of the respondent against the importance of maintaining appropriate standards in the security industry and the underlying policy of protecting the public when determining whether or not to cancel the licence. I accept that Mr Martinez-Diaz has limited skills to work in other industries and is likely to face financial difficulty if his security licence were to be cancelled. However, he is not without the experience and abilities to obtain alternative employment. He also has cooperated fully with authorities in relation to these offences and has expressed remorse for his actions. As against this, his offending in 2004 involved a serious breach of trust in that he stole the very thing he was employed to guard. A purpose of these proceedings is to ensure that the public interest is protected. It is not to impose a punishment on the respondent. He has already been dealt with in accordance with the relevant Criminal Law. However, it follows that factors relating to personal circumstances can be given only limited weight in these proceedings.
In determining the question of the appropriate disciplinary action in this case, I start with the proposition that the respondent has committed acts which normally would disentitle him from holding a licence. In such cases, the appropriate disciplinary action is cancellation unless the circumstances can justify a lesser penalty.
The offences committed in 2004 directly offend the required standards established by the legislature, particularly given that the respondent abused his position of trust to steal from his employer. The later social security offending, whether or not it might, on its own, constitute a basis for disciplinary action, underscores Mr Martinez-Diaz’s lack of understanding and respect for the industry and community standards which licensed security agents are expected to meet. It also undermines any contention that his earlier offending was isolated or out of character.
The respondent’s counsel indicated to the Court that Mr Martinez-Diaz is no longer employed in a role where he has contact with monetary based transactions or activities and submitted that a licence condition prohibiting this type of work would safeguard the public sufficiently.
In my view, Mr Martinez-Diaz’s 2004 offences were not minor infractions and such a licence condition would not allow for an appropriate and workable remedy. The cases where the court has been prepared to consider options alternative to cancelling a licence, in the main, have been concerned with misconduct undertaken in a personal rather than a professional capacity. In my view, this is an important distinction. In the present case, the respondent acted dishonestly while enjoying a position of trust with his employer and his employer’s client and in the course of performing the very duties for which he was licensed. I am not satisfied that any such restrictive condition would provide a satisfactory level of protection for the public. There would be practical problems in supervising a condition to this effect. Perhaps more importantly, there will be many situations where a security guard with such a restricted licence will have access to property and other potentially valuable opportunities even if he or she does not deal with money. Honesty and trustworthiness will remain as essential attributes. Furthermore, such a result would fail to send a clear message to others about the importance of protecting the public and maintaining industry standards.
I am also of the opinion that suspension of the licence for a period of time would be an inappropriate remedy. This also would fail to achieve the policy objectives of the legislation. The respondent has failed to demonstrate that he possesses the qualities of honesty and moral integrity which are necessary in order to be licensed to perform the role of a security agent.
Accordingly, I have come to the conclusion that the only appropriate course in this case is to cancel the respondent’s licence.
I do not propose to make the further order sought on behalf of the Commissioner, pursuant to s29(1)(e) of the Act, that Mr Martinez-Diaz be prohibited from being employed in the security industry. This is a matter that can be left to be determined in accordance with the terms of the legislation and its application by the Commissioner should Mr Martinez-Diaz re-apply for a licence in the future.
Orders
I order, pursuant to s29(1)(c)(iii) of the Act, that Mr Martinez-Diaz’s licence be cancelled and that he return licence number ISL 165513 to the Commissioner for Consumer Affairs within 7 days of today.