Commissioner for Fair Trading, Office of Fair Trading v Cromwell's Auctioneers & Appraisals Pty Limited (GD)

[2005] NSWADTAP 25

Appeal Panel - Internal

CITATION:	Commissioner for Fair Trading, Office of Fair Trading v Cromwell's Auctioneers & Appraisals Pty Limited (GD) [2005] NSWADTAP 25
PARTIES:	APPELLANT Commissioner for Fair Trading, Office of Fair Trading RESPONDENT Cromwell's Auctioneers & Appraisals Pty Limited
FILE NUMBER:	059002
HEARING DATES:	30/03/2005
SUBMISSIONS CLOSED:	03/30/2005
DATE OF DECISION:	06/08/2005
DECISION UNDER APPEAL:	Cromwell's Auctioneers & Appraisers Pty Ltd v Commissioner for Fair Trading [2004] NSWADT 281
BEFORE:	Hennessy N - Magistrate (Deputy President); Molony P - Judicial Member; Antonios Z - Non Judicial Member
CATCHWORDS:	adequacy of reasons - leave to appeal out of time - leave to extend to the merits - statutory interpretation
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	043008
DATE OF DECISION UNDER APPEAL:	12/03/2004
LEGISLATION CITED:	Administrative Decisions (Judicial Review) Act 1977 (Cth) Administrative Decisions Tribunal Act 1997 Motor Dealers Act 1974
CASES CITED:	Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Barwick -v- Law Society of New South Wales (No. 2) (LSD) [2003] NSWADTAP 4 Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 Hindi v Minister for Immigration and Ethnic Affairs (1988) 91 ALR 586 Housing Commission (NSW) v Tatmar Pastoral Co [1983] 3 NSWLR 378 Khan v Minister for Immigration and Ethnic Affairs (unreported) Federal Court, 12 December 1987 Minister for Community Services -v- CE (No.1) [2002] NSWADTAP 7 Pettitt v Dunkley [1971] 1 NSWLR 376 Pickles Auctions Pty Ltd v Registrar Consumer Claims Tribunal and Ors, Supreme Court of NSW 9 September 1994, unreported Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 R v Barnet London Borough Council; Ex parte Nilish Shah [1983] 2 AC 309 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Trlin v Commissioner of Fair Trading [2003] NSWADT 222
REPRESENTATION:	APPELLANT R Henderson, counsel RESPONDENT P Glissan, counsel
ORDERS:	1. The decision of the Tribunal is set aside; 2. The matter is remitted to be heard and decided again by the Tribunal as originally constituted, without the hearing of further evidence

Introduction

1 Mr James Byrnes is the sole director of Cromwell’s Auctioneers & Appraisers Pty Ltd (the company). The Commissioner for Fair Trading refused the company’s application for a dealer licence under the Motor Dealers Act 1974 (the Act) on two grounds. The first ground was that the company was “not likely to carry on . . . business honestly and fairly”. The basis for that ground was an allegation that the company has been acting unlawfully by auctioning motor vehicles without a licence. The second ground for the Commissioner’s decision was that if Mr Byrnes were to apply for the licence personally, he would not be a fit and proper person to be granted such a licence. The basis for this ground was that Mr Byrnes has been convicted of several criminal and traffic offences and had allegedly behaved in an intransigent manner towards officers from the Office of Fair Trading.

2 The company applied to the Tribunal for a review of the Commissioner’s decision refusing its application for a dealer licence. The Tribunal set aside the Commissioner’s decision and remitted the matter for reconsideration with the recommendation that the company be granted the licence if the Commissioner was satisfied the company complied with all the other necessary requirements. The Commissioner has appealed to the Appeal Panel against that decision.

Jurisdiction

3 The Notice of Appeal was filed about a week after the 28 day period provided for in s 113(3) of the Administrative Decisions Tribunal Act 1997 (ADT Act). The company did not make any submissions in relation to the late filing of the Notice of Appeal. Having taken into account the reasons for the late filing as set out in Mr Wilson’s affidavit of 15 February 2005, the length of the delay and the fact that there was no relevant prejudice to the company, we extend the time for the filing of the Notice to 10 January 2005.

4 The Commissioner is entitled to appeal on any question of law. He needs the Appeal Panel’s permission for the appeal to be extended to the merits of the decision (ADT Act: s 113(2)).

Issues

5 Before turning to the question of whether or not leave should be granted to extend the appeal to the merits of the decision, we look first at whether or not the Tribunal made an error of law in reaching its decision. The Commissioner submitted that the Tribunal made the following errors:

1. Misconstruing s 12(4)(h) of the Motor Dealers Act 1974 and taking into account whether Mr Byrnes, as the director of the company, had been, or would be involved in the day to day management of the company.

2. Failing to respond to the Commissioner’s submission about the intransigent attitude of Mr Byrnes towards officers from the Office of Fair Trading.

3. Failing to give adequate reasons:

a) for rejecting a submission that character evidence given by two witnesses who were not aware of Mr Byrnes’ conviction for assault in 2001 was of little assistance; and

b) for failing to find that the company had been selling vehicles while unlicensed.

6 The Commissioner’s first ground of appeal was that the Tribunal had misconstrued and wrongly applied s 12(4)(h) of the Act which states that:

(4) An application for a licence made by a body corporate shall be refused if it appears to the Director-General that:

(h) a director of, or a person concerned in the management of, the body corporate is not of good reputation or character or in any other way would not be a fit and proper person to be the holder of a licence if the director or person were to apply for the licence personally

7 The Commissioner submitted that because Mr Brynes is a director of the company, the level of his involvement in the company is immaterial for the purposes of s 12(4)(h). According to the Commissioner, the question the Tribunal should have asked itself is whether Mr Byrnes would be a fit person to be the holder of a licence if he were to apply personally, not whether his involvement in the company was so limited that the doubts cast on his fitness would not detract from the company’s application for a motor dealer licence.

8 The Tribunal’s reasoning and conclusion in relation to this issue is set out at [53] of its decision:

It is not in dispute that Mr. Byrnes is the sole director of the Applicant. While Mr. Byrnes asserts that his involvement in the day-to-day management of the Applicant is limited, the evidence suggests that at least throughout the course of this matter his involvement has been close. This is to be expected given the importance placed on the licence application. It is also understandable that he would have had concerns for the protection of the Applicant’s records at this time and would have placed strict limits on access to those records. The response given to the Department’s investigators during their visit to the Applicant’s premises on 1 April 2004 must be seen in this light. However, if Mr. Byrnes were to continue to have that level of involvement with the Applicant, it is highly relevant whether he is considered to be a fit and proper person to hold a dealer licence.

9 The company led evidence and made submissions to the Tribunal about the extent of Mr Byrnes’ involvement in the company. The Tribunal found that throughout the course of this matter, Mr Byrnes’ involvement in the company has been close. Although the meaning of the last sentence of the paragraph quoted above is not entirely clear, we interpret that sentence to mean that if Mr Byrnes continues to have a close involvement with the company, then his fitness and propriety is highly relevant to the question of whether or not he should be granted a licence.

10 In our view, although the Tribunal made a finding about the level of Mr Byrnes’ involvement with the company, that finding was not a necessary step in reaching the ultimate conclusion. . Earlier in its decision, the Tribunal adopted the test for determining fitness and propriety as set out in Trlin v Commissioner of Fair Trading [2003] NSWADT 222. There is no mention in that test of the applicant’s involvement in the affairs of the company. Nor does the Tribunal mention Mr Byrnes’ level of involvement in any of its subsequent reasoning. The last sentence in [53] was merely an obiter remark pointing out that it is important that people with a close involvement with a company applying for a dealer licence, be of good character. The Tribunal acknowledged at the beginning of [53] that Mr Byrnes is the sole director of the company.

11 Even if the Tribunal’s finding was part of the ratio decidendi, there is no need to set aside the decision unless the decision would, or might, have been different had the error not been made. (Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353 per Mason CJ) According to the Commissioner, the Tribunal’s error infected its subsequent reasoning process and its conclusion. We do not agree with that submission. If it is accepted that the Tribunal regarded Mr Byrnes as a fit and proper person even though he had a close involvement with the company, we find that it would have reached the same view about Mr Byrnes’ fitness if he had a more limited involvement with the company.

Attitude to regulatory authorities

12 The Commission submitted to the Tribunal that Mr Byrnes’ negative attitude towards Departmental officers was another reason that he was not a fit and proper person to hold a licence had he applied for one personally. The Commissioner submitted that on the evidence before the Tribunal, Mr Byrnes, the sole director of the company, refused to produce documents to the regulatory authority which oversees the conduct of licensed motor dealers. That refusal extended beyond 1 April 2004 and the material was never produced to the Commissioner. Mr Byrnes conceded having in the past “held a strongly negative attitude towards authority” and his conduct on and after 1 April 2004 indicated that his attitude remains unchanged. According to the Commissioner, the Tribunal failed to address those issues at all. Instead, it made excuses or accepted excused for Mr Byrnes conduct.

13 The Tribunal came to the following conclusions in relation to the evidence at [61] and [62]:

61 I note the evidence of the Department’s investigators regarding their visit to the Applicant’s premises. That evidence suggests that Mr. Byrnes had adopted an antagonistic attitude to the regulator. As I have indicated above, I consider that this attitude must be seen in the light of the fact that these proceedings were underway at the time. I also accept that Mr. Byrnes could have seen the Department’s actions in arriving at the Applicant’s premises unannounced whilst these proceedings remained on foot was intimidating.

62 . . . .It is apparent from the evidence that both Mr. Byrnes and Mr. Gildea indicated to the investigators that they wished to cooperate with the Department. . .

14 The Commissioner relied on three main authorities to support its submission that the Tribunal had made an error of law. The first two concern decisions made under the Administrative Decisions (Judicial Review) Act 1977 (Cth). In Hindi v Minister for Immigration and Ethnic Affairs (1988) 91 ALR 586 at 597 Sheppard J adopted a test set out by Gummow J in Khan v Minister for Immigration and Ethnic Affairs (unreported) Federal Court, 12 December 1987. In that case Gummow J asked whether the administrator had given the application under consideration “proper, genuine and realistic consideration upon the merits of the case and be ready in a proper case to depart from any applicable policy.” Even if we accept that failing to give “proper, genuine and realistic consideration” to the evidence and the submissions of parties is an error of law, we are not satisfied that the Tribunal has erred in this case. The Tribunal set out in detail at [31] to [40] the evidence relied on by the Commissioner concerning the attitude of Mr Byrnes to officers from the Office of Fair Trading. The Tribunal agreed that that evidence “suggests that Mr. Byrnes had adopted an antagonistic attitude to the regulator.” We are satisfied that the Tribunal gave “proper, genuine and realistic consideration” to that evidence.

15 The third authority on which the Commissioner relied Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267. The Federal Court (Jenkinson, Woodward and Foster JJ) was asked to find that the failure of the Administrative Appeals Tribunal to mention a submission or the questions of fact which it raised, was an error of law. The Federal Court concluded at p 276 that while not every failure to mention a contention advanced on behalf of a party will amount to an error, in this case the submission was “worthy of consideration and was seriously advanced to the tribunal.” In those circumstances, the Federal Court found that the Administrative Appeals Tribunal had made an error of law by failing to consider and determine each question of law and fact relevant to the determination of the matter.

16 The Tribunal’s findings and reasoning in the present case are easily distinguishable from the situation in Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267. The Tribunal did not fail to mention the evidence or submissions made by the Commissioner. The Tribunal acknowledged that Mr Byrnes had adopted an antagonistic attitude to regulators, but also that he had indicated to regulators that he wished to co-operate with them. The Tribunal weighed the evidence and came to the conclusion that Mr Byrnes’ attitude to regulators must be seen in context. This is not a case where Tribunal failed to consider and determine each question of law and fact relevant to the determination of the matter.

Character witnesses

17 Facts and submissions before Tribunal. It was not in dispute that Mr Byrnes was convicted of assault in 2001 and fined $500. The Commissioner noted that Mr Byrnes had not told either of his character witnesses about that conviction and submitted to the Tribunal that in those circumstances, their evidence was of little assistance. The Commissioner submitted that the fact that Mr Byrnes did not disclose the assault conviction to his character witnesses was a matter that had a direct bearing on his fitness.

18 Tribunal’s reasoning. The Tribunal set out the evidence of the character witnesses at [9] to [13]. At [54] the Tribunal said that “Witnesses who appeared for the Applicant gave evidence of the present situation and suggest a changed man but it is not suggested he is one who has undergone a total reformation.” The Tribunal acknowledged at [55] that two character witnesses were unaware of the 2001 conviction:

Mr. Wilson has submitted that the evidence of Mr. Hobbs and Dr Grech is of little assistance to Mr. Byrnes, as they had not been told of Mr. Byrnes’ 2001 conviction for assault. While the evidence shows that neither was aware of the conviction I do not agree with the general thrust of Mr. Wilson’s submission. During the hearing there was some passing reference to Mr. Byrnes’ notoriety. It seems to me to be implausible to think that neither Mr. Hobbs nor Dr Grech would have had some idea of Mr. Byrnes’ background yet they nevertheless hold him in high regard. With the exception of his police record, the Commissioner led no evidence to contradict the evidence of Mr. Hobbs and Dr Grech. I can take no account of any supposed notoriety without evidence to support it.

19 Grounds of appeal. The Commissioner said that the Tribunal’s treatment of this issue constituted an error of law on two grounds: firstly that the Commissioner’s submission warranted serious consideration and secondly that the Tribunal did not give adequate reasons for its decision.

20 Serious consideration. It is apparent from the passages quoted above that the Tribunal dealt squarely with the evidence and with the Commissioner’s submission. The Tribunal weighed the evidence and came to the conclusion that Mr Byrnes’ attitude to regulators must be seen in context. This is not a case where Tribunal failed to consider and determine each question of law and fact relevant to the determination of the matter.

Adequacy of reasons

21 Does the Tribunal have a duty to give adequate reasons? The Commissioner relied on s 89(5) of the ADT Act to submit that the Tribunal had failed to give adequate reasons for its rejection of Mr Wilson’s submissions about the weight to be given to character evidence. Section 89 provides as follows:

(1) If the Tribunal makes an original decision or determines an application for the review of a reviewable decision, the Tribunal is to cause a copy of its decision to be served on each party to the proceedings for the decision.

(2) The Tribunal may give reasons either orally or in writing for its decision.

(3) If the Tribunal does not give reasons in writing for its decision:

(a) a party to the proceedings may, within 28 days after the day on which a copy of the decision of the Tribunal is served on that party, request the Tribunal to give the party a statement in writing of the reasons of the Tribunal for its decision, and

(b) the Tribunal must, within 28 days after receiving the request, give the party such a statement.

(4) For the purposes of compliance with subsection (3), it is sufficient if the Tribunal gives the party a copy of a transcript of oral reasons previously delivered that complies with subsection (5).

(5) If the Tribunal gives the reasons for its decision in writing under subsection (3), the written reasons are to set out the following:

(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,

(b) the Tribunal’s understanding of the applicable law,

(c) the reasoning processes that lead the Tribunal to the conclusions it made.

22 Section 89(2) imposes a duty on the Tribunal to give reasons, either orally or in writing. Section 89(3) is directed to situations where a party requests written reasons after the Tribunal has given oral reasons. Section 89(5) requires the Tribunal to include certain matters in any written reasons given under s 89(3). Section 89(5) does not apply to the situation where the Tribunal reserves its decision and later hands down written reasons in accordance with s 89(2), as in the present case. This is so despite the contrary assumption in previous decisions of the Tribunal (see, for example, Barwick -v- Law Society of New South Wales (No. 2) (LSD) [2003] NSWADTAP 4 at [134]ff). There is no other provision in the ADT Act regulating the content or nature of reasons given in these circumstances.

23 Common law duty to give adequate reasons. Even though there is no statutory requirement governing the adequacy of reasons given under s 89(2), common law principles are relevant. The common law position has evolved to the point where there is now a judicial duty to give adequate reasons: see, for example, Pettitt v Dunkley [1971] 1 NSWLR 376; Public Service Board of New South Wales v Osmond (1986) 159 CLR 656; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430. That duty appears to apply to tribunals as well as courts. In Minister for Community Services -v- CE (No.1) (CSD) [2002] NSWADTAP 7 at [9], the Appeal Panel observed that: “In the case of tribunals making determinations and making final orders, s 89(5) reflects the common law position. It is clear that a tribunal has a duty to give adequate reasons for decision, and a failure to do so is an error of law.”

24 Content of the duty to give reasons. At common law, a court is required to give reasons “so far as it is necessary to enable the case properly and sufficiently to be laid before the appellate court”: Pettitt v Dunkley [1971] 1 NSWLR 376 at 388; cited by Gibbs CJ in Public Service Board of New South Wales v Osmond (1986) 159 CLR 656; 63 ALR 559 at 565; see also Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 268 per Mahoney JA. The duty to give reasons “does not exist in respect of every matter, of fact or of law, which was or might have been raised in the proceeding. It is not the duty of the judge to decide every matter which is raised in argument. He may decide a case in a way which does not require the determination of a particular submission: in such a case he may put it aside or, as Lord Scarman said, merely salute it in passing: R v Barnet London Borough Council; Ex parte Nilish Shah [1983] 2 AC 309, at 350”: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269-70 per Mahoney JA; see also Housing Commission (NSW) v Tatmar Pastoral Co [1983] 3 NSWLR 378 per Mahoney JA at 385. There is, however, no need to give elaborate reasons. (In Housing Commission (NSW) v Tatmar Pastoral Co [1983] 3 NSWLR 378 Mahoney JA said at p 386.)

25 Did the Tribunal give adequate reasons in relation to credibility of witnesses? In coming to a decision about Mr Byrnes’ fitness and propriety, the Tribunal had to weigh up several factors, some in favour of Mr Byrnes and some against him. One of those factors was the character evidence given in relation to Mr Byrnes. The Commissioner urged the Tribunal not to take that evidence into account because those witnesses did not know of Mr Byrnes’ conviction in 2001. The Tribunal considered and rejected that submission. It found that it was implausible to think that neither Mr Hobbs nor Dr Grech would have had some idea of Mr Byrnes’ background. That was one of the reasons for rejecting the Commissioner’s submission. While the reasoning was not elaborate, it did not need to be. The basis for the Tribunal’s decision is apparent and no error has been made.

Selling vehicles while unlicensed.

26 The second area about which the Commissioner submitted that the Tribunal did not provide adequate reasons was in relation to Mr Byrnes allegedly conducting the business of a motor dealer while unlicensed. The Commissioner submitted that the Tribunal did not give adequate reasons for deciding that it was “not prepared to draw any negative inferences from the (company’s) conduct of its motor vehicle auctions to date.” The Tribunal’s reasons were set out at [59] and [60]:

59 The Commissioner contends that the evidence suggests that the Applicant has been carrying on the business of a "dealer" without being the holder of a licence. "Dealer" is defined in section 4 of the Act to mean "a person who carries on the business of buying, selling or exchanging motor vehicles, but does not include a financier". The term "sell" is defined to mean, "to sell as principal or agent". The Commissioner points to the decision in Pickles Auctions Pty Ltd v Registrar Consumer Claims Tribunal and Ors , Supreme Court of NSW 9 September 1994 unreported as authority for the principle that an auctioneer of goods acts as agent for the vendor. The Commissioner argues therefore that the Applicant is required to be licensed to undertake its motor vehicle auction activities. In contrast the Applicant concedes that its documentation uses the term “agent” but it contends that it does not operate in that capacity. Its evidence is that it does not take vehicles on consignment, but rather under a temporary bailment, and it maintains that it has not been trading in a manner that requires a licence. In fact the Applicant had received legal advice on the issue and was advised that it is a grey area of the law. At the time of hearing no action had been taken against the Applicant in relation to this issue.

60 In my view, the evidence presented by the Commissioner in support of this allegation is inconclusive. I do not share Mr. Wilson’ s confidence that this is a settled area of the law. Accordingly, I am not prepared to draw any negative inferences from the Applicant’s conduct of its motor vehicle auctions to date.

27 At [59], the Tribunal summarised the submissions of each of the parties in relation to this issue. The Tribunal concluded, at [60] that the evidence that Mr Byrnes had been operating unlawfully was inconclusive and that, in any case, the legal principles applicable to that evidence were not clear. For those reasons, the Tribunal said it was not in a position to make a finding as to whether there had been a potential breach of the Act. According to the Commissioner, the Tribunal failed to:

- identify the evidence upon which it relied in order to conclude that the company does not sell cars as an agent;

- cite any statutory provisions or any authority to support the proposition that an agent is not an agent if he claims to be a temporary bailee; and

- explain its understanding of the law of bailment, or of agency.

28 Did the Tribunal give adequate reasons in relation to selling vehicles while unlicensed? In our view, while the Tribunal’s reasons were adequate, it made an error of law in that it failed to determine or apply the relevant law in relation to the question of agency or bailment. The Tribunal merely said that it did not share Mr Wilson’s confidence that this is a settled area of the law. Regardless of whether the law is settled or not, it was the Tribunal’s duty to identify its understanding of the applicable law and then apply it to the facts of the case. While those facts may not have been sufficient for the Tribunal to conclude that the company was acting as an agent, its failure to identify the relevant law and then apply it to the facts constitutes an error.

Extension to the merits

29 This is a matter where the law needs to be determined and the facts applied. Although the appellant urged us to grant leave to extend the appeal to the merits of the decision, the disadvantage of doing so is that should either party wish to appeal against our findings, then they would need to do so in the Supreme Court. In those circumstances it is appropriate that the Tribunal, rather than the Appeal Panel, determine the merits of the application.

Orders

30 Having identified an error of law, we set aside the Tribunal’s decision and remit the case to be heard and decided again by the Tribunal as originally constituted, without the hearing of further evidence.

Costs

31 The Commissioner applied for costs. If the Commissioner wishes to have that application considered by the Appeal Panel, then the following directions should be complied with:

1. Commissioner to file and serve written submissions in support of its application with 14 days of the date of this decision.

2. Respondent to file and service written submissions in response within a further 14 days.

3. Application for costs to be decided “on the papers” pursuant to s 76 of the Administrative Decisions Tribunal Act 1997.