David Bouch & Co Pty Ltd v Director General, Department of Fair Trading

[2000] NSWADT 100

CITATION:	David Bouch & Co Pty Ltd -v- Director General, Department of Fair Trading [2000] NSWADT 100
DIVISION:	General Division
PARTIES:	APPLICANT David Bouch & Co Pty Ltd RESPONDENT Director General, Department of Fair Trading
FILE NUMBER:	003024
HEARING DATES:
SUBMISSIONS CLOSED:	03/30/2000
DATE OF DECISION:	07/28/2000
BEFORE:	Fleming G - Judicial Member
APPLICATION:	Pawnbrokers & Second-Hand Dealers Act - second-hand dealers licence - impose a condition on licence - Second-Hand Dealers licence - impose a condition on licence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Pawnbrokers and Second-hand Dealers Act 1996
CASES CITED:	Flens & Anor v Department of Fair Trading [1999] NSWADT 76
REPRESENTATION:
ORDERS:	Decision under review is affirmed

1 Fair Trading for the issue of a license to act as a second-hand dealer, pursuant to section 7 of the Pawnbrokers and Second-hand Dealers Act 1996. On 19 November 1997 a license was issued to David Bouch & Co Pty Ltd subject to the condition that;

“You must use electronic means of creation and storage of records for the purposes of Sections 16 and 28 of the Pawnbrokers and Second-Hand Dealers Act 1996, using software which complies with the specifications issued by the New South Wales Police Service titled ‘Pawnbroker and Second-hand Dealers System (Dealers Software Specifications)’, as modified from time to time”.

2 On 30 December 1999 the Applicant lodged an application with the Director General, Department of Fair Trading, for internal review of the decision to issue the company with a license subject the condition stated. The decision was affirmed on 21 January 2000.

3 The primary issue to be resolved in this application is whether the license issued to David Bouch & Co Pty Ltd is required to be issued subject to a condition in relation to the keeping of computerised records. The Applicant objects to the imposition of such a condition on the licence.

THE RELEVANT LAW

4 The Tribunal has jurisdiction to hear this matter pursuant to section 38 of the Administrative Decisions Tribunal Act 1997 and section 39(2) of the Pawnbrokers and Second-hand Dealers Act 1996.

5 The Pawnbrokers and Second-hand Dealers Act 1996 (‘the Act’) provides, among other things, that the Director General, Department of Fair Trading, may issue a license subject to any conditions that he or she thinks fit (section 11(1)). The Pawnbrokers and Second-hand Dealers Regulations 1997 (‘the Regulations’) prescribe the content of those conditions (Section 11(2)).

6 Sections 16 of the Act require licensed second-hand dealers to keep certain records. Clause 13 of the Regulations addresses the method of keeping of records generally. Clause 13(4) requires the Director General to impose on licenses issued or renewed after 1 January 1999, a condition that the licensee ‘use electronic means of creation and storage of records’ kept for the purposes of the Act. Clause 13(4) is in mandatory terms and states that the Director General is to require the licensee to keep electronic records by way of imposing such a condition on the license, unless the licensee falls within an exemption.

7 Clause 13A of the Regulations contains certain exemptions. Clause 13A(1) provides that where a person held a license under the Second-hand Dealers and Collectors Act 1906 prior to 30 April 1997 and has never previously held a license requiring the keeping of electronic records, then that person may apply for an exemption from the mandatory condition imposed by Clause 13(4). Clause 13A(2) provides that if ‘a person makes such an application’ then the Director General has a discretion in relation to the imposition of the condition if (a) the person was entitled to make such an application and (b) the gross receipts of the business in the previous financial year did not exceed $150,000. Clause 13A(2), in the Tribunals view, applies only to those persons described in Clause 13A(1) namely persons who previously held the required license without a similar condition.

8 It is relevant here to describe the objective of these provisions. The Regulatory Impact Statement to the Pawnbrokers and Second-hand Dealers Regulation 1997 set out the objective of the record keeping requirements of the Regulations as follows;

9 The proposed Regulation specifies that licensees must keep detailed records and maintain records in a computerised form. This is to enable the direct transmission of data to police on a regular and timely basis. This data is then able to be cross checked against computerised records of stolen goods. These requirements help to ensure that the Act operates to increase the effectiveness of law enforcement to recover stolen goods and apprehend offenders.

THE EVIDENCE

10 The Tribunal held a directions hearing in this matter on 2 March 2000 and the parties attended. Following the directions hearing the Respondent made written submissions which are before the Tribunal. Also before the Tribunal is a copy of documents provided by the Department of Fair Trading pursuant to section 58 of the Administrative Decisions Tribunal Act 1997. Mr Bouch did not make written submissions on behalf of the Applicant but relied on submissions previously sent to the Department of Fair Trading by his accountant Jirsch Ryker. The Tribunal has taken these submissions into account.

11 A hearing was not held until 3 July 2000 because the Applicant had been overseas and unable to attend the Tribunal earlier. Mr Bouch attended the hearing in person and the Director General’s representative attended by telephone.

12 Mr Bouch submitted to the Tribunal that the Director General should not impose a condition on the license issued to the Applicant . He submitted, in summary, that to impose a condition requiring the keeping of electronic records would impose undue hardship because of the nature of the business, the small turnover in second-hand goods and the cost of introducing electronic record-keeping. Mr Bouch also submitted that David Bouch & Co Pty Ltd held a license for many years up until 1997 and that it should have the benefit of the exemption in the Regulations. This exemption provides, in effect, that where a licence was held ‘immediately before’ 30 April 1997 the license may be issued without condition requiring electronic record keeping.

13 The Applicant submitted that given the small volume of trading for which the license was required the cost of purchasing a computer system and the required software was prohibitive.

14 Mr Bouch told the Tribunal that the failure to renew the license, when it expired on 7 April 1997 was an oversight on his part. He had expected that the Department of Fair Trading would write to him to remind him of the need to renew however that did not occur and the matter was overlooked. He did not apply for renewal then until the matter was discovered in November 1997.

15 The Respondent submitted that the Tribunal had no discretion in relation to the imposition of the condition on the license that the licensee use electronic means of creation and storage of records. Section 11 of the Act provides that a license is subject to any conditions which the Direction General sees fit to attach to it and further provides that the Regulations may make provision in relation to conditions to be imposed. Clause 13 of the Regulations directs the Director General, in mandatory terms, to require the use of electronic means of storage. Clause 13 further requires that the software to be used be “of a kind specified in the condition”. The Respondent referred the Tribunal to the decision of Flens & Anor v Department of Fair Trading [1999] NSWADT 76. This case is discussed later in these reasons.

FINDINGS

16 The Tribunal has considered the submissions put by Mr Bouch on behalf of David Bouch &Co Pty Ltd. In particular the Tribunal has considered the submission that the Applicant was a “person who held a second-hand dealer’s licence under the Second-hand Dealers And Collectors Act 1906 immediately before the repeal of that Act on 30 April 1997” (Section 13A(1)).

17 The Tribunal rejects this submission. It is clear on the evidence that the licence held by David Bouch & Co Pty Ltd expired on 7 April 1997. There was no attempt to renew it before 30 November 1997. While it is not material to this application the Tribunal has concerns as to whether the Applicant in fact continued to trade in second-hand goods during this period.

18 The Tribunal does not accept that a licence held on 7 April 1997 was held ‘immediately before’ 30 April 1997. The Tribunal is of the view that this provision is intended to benefit those licence holders who held a licence under the repealed Act on the day before it was repealed, namely 29 April 1997. This provision allows, in effect, for those persons to continue to hold their licence without the sudden imposition of new conditions. Thus minimising disruption to trading and confusion over licence requirements.

19 The Tribunal has considered similar issues to those raised in this matter in a previous case, namely Flens & Anor v Department of Fair Trading [1999] NSWADT 76. In that case the Tribunal determined that the imposition of a condition, in identical terms to the one proposed here, was required by the Act and the Regulations and was reasonable and appropriate in the circumstances. The Director General is required to impose the condition by Clause 13(4) unless the Applicant can bring itself within an exemption. In this case the Applicant does not fall within any exemption. As the Tribunal noted in Flens,

“ it is clear that without the specification of uniform software to be used by all licensees the purpose of requiring electronic record would be lost. If information stored could not be centrally collated and checked by police then electronic record keeping arguably has no advantage over existing manual record keeping systems. The identification of detailed software required in the terms of the condition is a step towards ensuring uniformity of record keeping and thus the workability of the centralised data collection system ”

20 The Tribunal finds that the imposition of the condition as required by the original decision of the Respondent is the correct and preferable decision in the circumstances of this case.

DECISION

21 The Tribunal affirms the decision under review.