Commissioner for Consumer Affairs v Standley No. Scgrg-97-1437 Judgment No. S6579

[1998] SASC 6579

COMMISSIONER FOR CONSUMER AFFAIRS

v STANDLEY

Full Court
Coram:  Doyle CJ, Matheson and Prior JJ

Doyle CJ

This is an appeal against a decision of the District Court in its Administrative and Disciplinary Division. By section 43(3) of the District Court Act, 1991 the appeal is limited to a question of law, leave not having been sought or obtained to appeal on a question of fact.

The issue on appeal arises under the Security and Investigation Agents Act, 1995 ("the Act").

The issue on appeal is whether, in refusing to grant a licence under the Act, the Commissioner for Consumer Affairs ("the Commissioner") erred in law in deciding that, because an applicant for a licence had been convicted of certain offences, the Commissioner had no power to grant the licence sought.  In brief, the licence applicant argued that the Commissioner had a discretion to grant the licence, and that the Commissioner had erred in failing to consider the exercise of the discretion.  The licence applicant also argued that the offences in question were not offences that prevented the grant of the licence.

The District Court upheld the first submission, and remitted the matter to the Commissioner for consideration.  The Commissioner has appealed.  For convenience, I will continue to refer to the respondent as "the licence applicant".

At the hearing of the appeal, the Court allowed the licence applicant to argue that a regulation under the Act, upon which the Commissioner had relied, was invalid.  We heard that argument although it had not been raised, as it should have been, by a Notice of Alternative Contention.

Background

The Act requires a person who carries on business or acts as a security agent or investigation agent to hold a licence under the Act.  "Security agent" and "investigation agent" are each defined in fairly broad terms:  see section 3 of the Act.

Licences under the Act are of three classes.  A licence can be a security agent’s licence, an investigation agent’s licence, or a restricted form of either of those licences.  A restricted licence is one subject to conditions.  The condition can relate to the functions that can be performed (for example, a condition limiting the function to controlling  crowds), or to a requirement for supervision by the holder of an unrestricted licence, or the condition may require the person to carry on business only in partnership with a person specified in the licence.

Application for a licence is to be made to the Commissioner:  section 8.  The application is to be made in the manner and form approved by the Commissioner:  section 8(1)(a).  Regulations have been made under the Act ("the Regulations").  Neither the Act nor the Regulations contain a provision that specifies the procedure to be followed by the Commissioner once an application is made.  An applicant must provide the Commissioner with any information required by the Commissioner:  section 8(2).  The Commissioner can require the Commissioner of the Police to investigate and report on any matter relevant to an application under the Act:  section 39(a).

It appears from this that an application for a licence is to be determined administratively, it being up to the Commissioner to determine how an application will be dealt with as a matter of procedure.  It is not necessary to consider to what extent the Commissioner might be obliged to give an applicant an opportunity to respond to adverse information relating to an applicant.

For present purposes, the critical provision is section 9 of the Act.  Section 9 provides (omitting subsection (2) which relates to applications by a body corporate):-

"9. (1)       A natural person is entitled to be granted a licence if -

(a)     the person has -

(i)     the qualifications and experience required by regulation for the functions to be authorised by the licence;  or

(ii)     subject to the regulations, qualifications and experience the Commissioner considers appropriate having regard to the functions to be authorised by the licence and whether the licence is to be subject to an employee (supervision) condition;  and

(b)     the person has not been convicted of an offence of a class specified by regulation in relation to the functions to be authorised by the licence;  and

(c)     the person is not suspended or disqualified from practising or carrying on an occupation, trade or business under a law of this State, the Commonwealth, another State or a Territory of the Commonwealth;  and

(d)     the person is a fit and proper person to be the holder of the licence;  and

(e)     in the case of a licence not to be subject to an employee condition, the person -

(i)     is not an undischarged bankrupt or subject to a composition or deed or scheme of arrangement with or for the benefit of creditors;  and

(ii)     has not, during the period of five years preceding the application for the licence, been a director of a body corporate that has been wound up for the benefit of creditors -

(A)    when the body was being so wound up;  or

(B)    within the period of six months preceding the commencement of the winding up;  and

(iii)    has sufficient business knowledge and experience and financial resources for the purpose of properly carrying on business under the licence.

1. ...

1. If, on an application by a person for a licence, the Commissioner -

(a)     is not satisfied that the applicant meets requirements as to qualifications, business knowledge, experience or financial resources;  but

(b)     is satisfied that the applicant proposes to carry on business as an agent in partnership with a person who does meet the requirements not satisfied by the applicant,

the Commissioner may, subject to the other provisions of this section, grant a licence to the applicant subject to a partnership condition.

1. If a licence is to be granted subject to a partnership condition to an applicant who does not have the qualifications and experience required under subsection (1)(a), the licence is also to be subject to a partnership (business only) condition."

A Regulation has been made for the purposes of section 9(1)(b).  Regulation 5 provides that a schedule to the Regulations "sets out classes of offences for the purposes of section 9".  The schedule provides as follows:-

"1.  (1)     For the purposes of section 9(1)(b) and (9)(2)(b)(i) of the Act, the following offences are prescribed in relation to any function to be authorised by a licence:

(a)     an indictable offence;

(b)     if the conviction was within the previous 5 years - a schedule 3 offence within the meaning of the Summary Procedure Act 1921 (an offence of dishonesty), other than a first offence of simple larceny;

(c)     common assault or any offence of violence, other than a first offence of common assault;

(d) an offence against the Controlled Substances Act 1984 involving a prohibited substance, other than a simple possession offence within the meaning of that Act;

(e) an offence against the Police Act 1952;

(f)     an offence against the Listening Devices Act 1972;

(g) an offence against the Telecommunications (Interception) Act 1979 of the Commonwealth;

(h) an offence against the Act or these regulations or the repealed Commercial and Private Agents Act 1986 or regulations made under that Act;

1. an offence substantially similar to any of the above offences against the law of another place."

The licence applicant applied for a restricted security agent’s licence.  The Commissioner was informed that the licence applicant was convicted in the Adelaide Magistrates Court of 12 offences contrary to section 76D(2)(b)(v) of the Crimes Act (Cth), 1914.  The convictions were recorded after the date of the application, but related to conduct that had occurred before the date of the application.  Under the Crimes Act the offence in question is an indictable offence.  It carries a maximum penalty of two years’ imprisonment.

The Commissioner determined that the licence applicant had been convicted of an indictable offence for the purpose of clause 1(1)(a) of the schedule to the Regulations.  The Commissioner therefore determined that the licence applicant had no entitlement to be licensed, by virtue of the provisions of section 9(1)(b) of the Act.  Accordingly, the Commissioner refused the application.

The licence applicant appealed to the District Court.  That Court set aside the Commissioner’s decision and remitted the matter to the Commissioner for reconsideration.

Was the licence applicant convicted of an indictable offence?

The logical starting point is to consider whether the licence applicant was convicted of an offence that fell within the schedule to the Regulations.

The submission for the licence applicant was that "indictable offence" must refer to an offence against the law of South Australia.  It was submitted that an indictable offence under a law of the Commonwealth was not a relevant indictable offence.

Section 5(3) of the Summary Procedure Act, 1921 provides that all offences, apart from summary offences, are indictable.  By virtue of section 5(2) of the Summary Procedure Act, the offences in question would have been classed as summary offences, had they been a breach of the law of South Australia.  This is so because section 5(2) of the Summary Procedure Act provides that offences that attract a maximum penalty of two years’ imprisonment are summary offences.  That provision did not, of course, apply to an offence under the Crimes Act of the Commonwealth.  Under the Crimes Act, the relevant offences are indictable, and could have been tried before a South Australian Court as indictable offences.

There can be no doubt that the reference to indictable offences in the Summary Procedure Act is to an offence against a law of this State.  But how is the reference to an indictable offence in clause 1(1)(a) of the schedule to the Regulations to be read?

The Acts Interpretation Act of this State does not provide a direct answer. It does not define "indictable offence". That expression appears in the definitions of "major indictable offence" and "minor indictable offence", and it is clear that those terms are used with reference to offences under a law of this State, but the fact remains that "indictable offence" is not itself defined.

The Act and the Regulations together constitute a scheme for occupational licensing of a kind that is well known these days.  A common concern of such laws, and of this particular scheme, is the fitness of the licence applicant to hold the licence sought.  Section 9 of the Act, and the schedule to the Regulations, illustrate that quite clearly.

Having regard to the purpose of the statutory scheme, there is no reason to restrict expressions referring to criminal conduct to offences against the law of this State.  The relevance of criminal offences to the fitness of the applicant is obvious.  The concern with offences, in the case of an applicant, is not where the offence was committed, but the nature or seriousness of the offence.

I therefore approach the construction of the schedule on the basis that there is no reason to read general expressions, relating to criminal offences, as restricted to criminal offences against the law of this State.  My first impression is that "indictable offence" is capable of referring to such an offence under a law of any part of the Commonwealth.  The same applies to common assault, and to offences of violence.  All of these are terms that are well known throughout the Australian legal system.

The fact that some of the provisions of the schedule refer to particular South Australian statutes does not alter that first impression.

In my opinion, if "indictable offence" is to be restricted to an offence under a law of this State, the restriction must be found by implication in subclause 1(1)(i) of the schedule.  The question is, does that provision imply that the earlier provisions, other than subclause (g), are restricted to offences against a law of this State?  The argument for the licence applicant is that offences against laws other than South Australian laws are picked up under subclause (i), and that to allow them to be picked up under subclause (a) or (c) respectively would be to deprive subclause (i) of all or much of its effect.  It is only in that modified form that the argument has some force.  Even if subclauses (a) and (c) relate to offences under the laws of other jurisdictions, subclause (i) still has work to do in relation to offences (non-indictable and not involving violence) substantially similar to the offences under the statutes referred to in subclauses (b), (d), (e), (f) and (h).

It should also be noted that, on the submission for the licence applicant, offences against Commonwealth law will never fall to be considered.  I say that because, in my opinion, a law of the Commonwealth could not be regarded as a law "of another place".  A valid law enacted by the Commonwealth Parliament will usually operate in South Australia alongside the laws of the Parliament of this State, and in the case of inconsistency will prevail over any such law.  The expression "the law of another place" is not apt to refer to a law of the Commonwealth.

However the schedule is read, the result is not an entirely tidy one.  I have come to the conclusion that subclause (a) and subclause (c) should not be read as restricted to offences under the laws of this State.  I consider that any limiting inference arising from subclause (i) is a weak one, and is outweighed by the conclusion that the purpose of subclauses (a) and (c) is to deal with certain types of conduct, and not just with offences against the laws of this State.

It suffices for present purposes to decide that sub-clause (a) extends to offences indictable before a South Australian court (be the offence one under State law or under Commonwealth law).  Whether or not it extends more widely need not be decided.

For those reasons I conclude that, in the present case, the Commissioner rightly concluded that the licence applicant had been convicted of an indictable offence.

The consequence of non-compliance with the requirements for a statutory entitlement

There is no provision in the Act which, in terms, confers a discretion on the Commissioner in relation to the grant or refusal of a licence.  If the Commissioner has a discretion to grant a licence, despite a failure by an applicant to satisfy the statutory requirements, that discretion must be found in the terms of section 9 of the Act.    Section 9 creates a statutory entitlement.  On proof of the statutory requirements, the licence must be granted.  It seems to me the Commissioner has no discretion to refuse the licence, if the statutory requirements are met.  The only discretion that might be found in section 9 is a discretion to grant a licence, despite a failure to satisfy the statutory requirements.  That is the discretion upon which the licence applicant relied.

All of those statutory requirements require the Commissioner to make a finding or finding of fact.  For example, that the person is not suspended or disqualified from practising or carrying on an occupation, trade or business under a law of South Australia:  section 9(1)(c).  Some of the statutory requirements go further, and require the Commissioner to make an assessment or form an opinion based on facts found.  Examples are section 9(1)(a)(ii) - what the Commissioner considers appropriate, and section 9(1)(d) - that the person is a fit and proper person.

The scheme of section 9 is for the Commissioner to consider whether certain facts are established, and in some cases to consider whether a further conclusion or opinion should be formed on the basis of certain facts.  Parliament has gone to some trouble to spell out, in terms of affirmative requirements and negative requirements, the matters on the basis of which an entitlement to a licence arises.

In the context of such a scheme, 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.  Moreover, if the Commissioner has a discretion to grant a licence even though the statutory requirements are not met, on what basis is that discretion to be exercised?  In that respect, the section is silent.

In my opinion, the natural reading of section 9 is that it establishes a scheme under which if the statutory requirements are met, the licence must be granted, and if they are not met, the licence is not to be granted.

The District Court Judge reasoned that section 9(1)(b) required the Commissioner, if an indictable offence had been committed, to consider "whether the circumstances of that offence would be such as to have an impact upon the functions to be authorised by the licence and logically then to exercise a discretion as to whether to grant a licence or not."  In my opinion, with all respect, that discloses a misconception.

Section 9(1)(b) empowers the making of Regulations that specify offences in relation to, or by reference to, the functions to be authorised by the licence in question.  So, for example, the Regulations could have prescribed an offence in relation to a security agent’s licence.  Alternatively, they could have prescribed an offence in relation to a restricted agent’s licence, or in relation to a particular function, such as crowd control.

In fact, the Regulations take the course of prescribing offences in relation to any function to be authorised by a licence.  In my opinion, that was within the power conferred by the Act.  The power to specify (or prescribe) an offence by reference to functions empowers the making of regulation that select particular functions, groups of functions, or all functions.

The reference to the functions to be authorised by the licence has nothing to do with the decision making process of the Commissioner.  It is merely part of the description of the power to make Regulations.  The only function of the Commissioner is to decide whether an offence, specified (or prescribed) by the Regulations, has been committed.  And, as I have already indicated, in my opinion, such an offence has been committed.

In my opinion the District Court Judge misunderstood the effect of section 9(1)(b).  He further erred in concluding that there was a discretion to be exercised.

Validity of Regulations

The submission under this head was that clause 1(1)(a) of the Schedule went beyond power.  The Court refused to allow the licence applicant to argue that the other sub-clauses of the Schedule went beyond power.  We did so for three reasons.  First, because the validity of those sub-clauses did not arise directly in the present case.  Secondly, because, even if some other sub-clauses of the Regulation went beyond power, there was no reason why, by a process of severance, sub-clause (a) could not stand.  Finally, we accepted the submission of the Solicitor-General that an argument that roamed across all of the sub-clauses, would or could require the Court to consider information about the relevance of the offences prescribed to the licensing of persons under the Act.  The Court did not have such information before it, the challenge to validity not having been raised until submissions were being advanced by counsel for the respondent.

As to sub-clause (a), the submission was that that sub-clause could embrace offences that had no relevance to the suitability of a person to hold a licence under the Act.  Accordingly, it was submitted that sub-clause (a) went beyond power.  The submission advanced is more easily illustrated by reference to other sub-clauses of the schedule.  However, for present purposes, I am prepared to assume that, if the statute book and the common law were canvassed, indictable offences could be found which, had they been committed by a licence applicant, would not cause one to regard the person as in any way unsuitable to be a licence holder under the Act.

The power conferred by section 9(1)(b) is a wide one.  No limits are specified.  As well, it is to be noticed that section 9(1)(d) of the Act deals specifically with the question of whether the person is a fit and proper person to be the holder of a licence.  It is therefore not to be assumed that the power to specify offences is a power limited to offences that would make a person not a fit and proper person to hold a licence.  While that may be the underlying idea, Parliament must have intended to confer a power which enabled the maker of the Regulations to determine, at least within certain limits, that the commission of an offence of a certain class was relevant to the suitability of a person to hold a licence.

It is not necessary in this case to consider, in any detail, the proper approach to a challenge to the validity of delegated legislation. I content myself with a reference to what was said on the matter by the High Court in South Australia v Tanner (1989) 166 CLR 161.

I proceed on the basis that, to be valid, sub-clause (a) of the Schedule must specify a class of offences that could reasonably be considered to have a connection with the suitability of a person to hold a licence, or with the appropriateness of granting a licence to a person. In my opinion, the Regulation maker could be equally concerned with the character or quality of the applicant, or with the impression that might be conveyed to the public by a decision to grant a licence under the Act to a person with a certain class of conviction. In my opinion it is necessary to bear in mind that the test of validity is the view that the maker of the Regulation could reasonably adopt. It is not for this Court to substitute its own opinion on the matter, and in particular not for the Court to substitute what was described as an "untutored judgment" in South Australia v Tanner (1989) 166 CLR 161 at 168. The other consideration that must be borne in mind is that, while the width or range of the class of offence specified is a relevant consideration, validity of the Regulation does not depend upon every instance of the Regulation’s operation having the necessary connection: see South Australia v Tanner (supra) at 167. When a general Regulation is made, it is the Regulation in its generality which must have the necessary connection with the head of power, and not each particular application of the Regulation.

Approaching the matter in that way, it is my opinion that sub-clause (a) of the schedule is within power.  In my opinion the commission of an indictable offence, which is usually a relatively serious offence, has an obvious connection to the suitability of a person to hold a licence under the Act.  It could reasonably be considered that such a conviction indicated either that the person was unsuitable, or that a person with such a conviction should not be held out to the public as an appropriate person to hold a licence under the Act.

I am satisfied that sub-clause(a) of the schedule has a sufficient connection to the power under which it is made, and that it is valid.

It is not necessary to express an opinion on the validity of any other sub-clause of the schedule.  In saying that I am not to be taken as casting a doubt on the validity of any other sub-clause.  I mention that the Court was referred to a decision of a Judge of the District Court in Longrigg v Commissioner for Consumer Affairs (7 October 1997, D3684, unreported) in which the Judge held that sub-clause (d) of the schedule was beyond power.  The Court was not asked to consider the correctness of that decision.

Conclusions

In my opinion, the licence applicant having been found to have been convicted an indictable offence for the purpose of clause 1(1)(a) of the Regulations, the licence applicant did not satisfy the requirement to be found in section 9(1)(b) of the Act, and accordingly had no entitlement to be granted a licence.  It followed that the Commissioner was obliged to refuse the application for a licence.

I would allow the appeal, set aside the decision of the District Court, and for that decision substitute an order affirming the decision by the Commissioner to refuse the application made to the Commissioner for a licence.

Matheson J

I agree with the judgment of Doyle CJ.

Prior J

I agree with the reasons given by the Chief Justice and with the orders proposed.