Flanagan v Commissioner of Fair Trading
[2004] NSWADT 166
•08/13/2004
CITATION: Flanagan v Commissioner of Fair Trading [2004] NSWADT 166 DIVISION: General Division PARTIES: APPLICANT
Steven Peter Flanagan
RESPONDENT
Commissioner for Fair TradingFILE NUMBER: 043140 HEARING DATES: 15/07/2004 SUBMISSIONS CLOSED: 08/10/2004 DATE OF DECISION:
08/13/2004BEFORE: Montgomery S - Judicial Member APPLICATION: Motor Dealer - grant of licence - Motor Dealers Act - motor dealer - grant of licence MATTER FOR DECISION: Principal matter LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Motor Dealers Act 1974CASES CITED: Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Hughes and Vale Proprietary Limited v State of New South Wales and Others [1955] 93 CLR 127
Jasmin v Commissioner of Police NSW police Service [2001] NSWADT 45
New South Wales Bar Association-v-Evatt (1968) 117
Sakellis v Officer in Charge of Police Paddington (1968) 88 WN (PT 1)(NSW)
Young Taek Chong v Tomazin (1994) ASC 56-283
Ziems-v-Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279REPRESENTATION: APPLICANT
S Hall, solicitor
RESPONDENT
J Coss, solicitorORDERS: 1. The Commissioner’s determination to cancel Mr Flanagan’s licence is affirmed.; 2. The Commissioner’s determination to disqualify Mr Flanagan from holding a licence under the Act for seven years is set aside. In its place the order is made that Mr Flanagan is disqualified from holding a licence under the Act for two years.
1 This is an application by Steven Peter Flanagan for review of a decision by a delegate of the Commissioner for Fair Trading (“the Commissioner") to cancel his licence as an auto-dismantler.
Background
2 Mr Flanagan was granted a motor dealer's licence in the class auto-dismantler (MD18329) under the Motor Dealers Act 1974 (“the Act") on 10 January 2002. The Licence was due to expire on 10 February 2005. Mr Flanagan trades as Machinery Drive Wreckers in Tweed Heads South.
3 On 4 November 2003 a delegate of the Commissioner issued a Notice to Show Cause under Section 20D of the Act. In the Notice, the delegate of the Commissioner stated that he had reasonable grounds to believe that:
- (a) within the meaning of section 20D(l)(dl)(ii) of the Act, within the preceding 10 years, Mr Flanagan had been found guilty of receiving or of being in unlawful possession of a motor vehicle part;
(b) within the meaning of section 20D(1)(b) of the Act, Mr Flanagan had been convicted of an offence against the Act;
(c) within the meaning of section 20D(1)(j) of the Act, Mr Flanagan is not a fit and proper person to continue to hold a licence.
4 The details were particularised in a Schedule to the Notice.
5 On 24 November 2003, Mr Flanagan responded to the Notice. On 5 May 2004 the Manager Fair Trading Investigations with the Office of Fair Trading (“OFT”), Mr Malcolm Finger, under delegation from the Commissioner determined to cancel Mr Flanagan's licence and to disqualify him from holding a licence under the Act for seven years. Mr Finger provided detailed reasons for his decision.
6 It is not in dispute that on 6 January 2003, Mr Flanagan was convicted of an offence of receiving stolen property and placed on a 2-year good behaviour bond under section 9 of the Crimes (Sentencing Procedure) Act 1999. The bond expires on 6 January 2005. Mr Flanagan was also convicted and fined for numerous breaches under s20D(1)(b) of the Act. These breaches included:
- a) failing to enter prescribed particulars in the register;
b) failing to mark prescribed parts;
c) failing to enter prescribed details on receipts for the sale of prescribed parts;
d) failing to keep register in prescribed form.
7 Division 3 of Part 2 of the Act provides for disciplinary proceedings against licensees. The applicable provisions in that Division are as follows:
- “20D Notices to show cause
(1) Where, at any time, the Director-General is of the opinion that there are reasonable grounds for believing that:
(a) a licence may have been improperly obtained or, at the time a licence was granted, there may have been grounds for refusing to grant it,
(b) the holder of a licence has been convicted of an offence against this Act or the regulations or any other enactment administered by the Minister,
(b1) the holder of a licence has been convicted of an offence under section 22 (2) or (4) of the Road Transport (Vehicle Registration) Act 1997 (Affixing of interstate number-plates on registrable vehicles in New South Wales),
(c) the holder of a licence may have failed to comply with this Act or the regulations, a condition or restriction to which the licence is subject or an order of the Tribunal applicable to the holder,
(d) the holder of a licence has, within the period of 10 years that last preceded the grant of the licence, been found guilty of an offence involving fraud or dishonesty punishable on conviction by imprisonment for 3 months or more,
(d1) the holder of a licence has (as an adult), within the preceding 10 years or the period of 10 years that last preceded the grant of the licence, been found guilty of:
- (i) an offence involving, or relating to, stealing a motor vehicle (within the meaning of section 154AA of the Crimes Act 1900 ), or
(ii) receiving, or being in unlawful possession of, a motor vehicle (within the meaning of section 154AA of the Crimes Act 1900 ) or a motor vehicle part,
(e) the business to which a licence relates is being carried on in a dishonest or unfair manner,
(f) if a person were not the holder of a licence, the Director-General would be required by section 12 (2) or (4) to refuse an application by the person for a licence,
(g) in the case of a holder of a dealer's licence (being a body corporate), the holder:
- (i) is in the course of being wound up,
(ii) is under official management,
(iii) is a body corporate in respect of which a receiver or manager has been appointed, or
(iv) has entered into a compromise or scheme of arrangement with its creditors,
(h) the holder of the licence has, for a period of 1 month or more, ceased to carry on the business to which the licence relates at a place of business to which the licence relates,
(i) the holder of the licence is contravening another Act or an instrument made under another Act by carrying on the business to which the licence relates at a place of business to which the licence relates, or
(j) the holder of a licence is, for any other reason, not a fit and proper person to continue to hold a licence,
the Director-General may, by notice in writing served on the holder of the licence, call upon the holder to show cause, within such period, being not less than 14 days, as is specified in the notice, why the holder should not, for the reasons specified in the notice, be dealt with in accordance with this Division.
(1A) By way of example of the operation of subsection (1) (d2), the Director-General may consider that the holder of a licence in whose custody stolen goods are found is probably receiving or dealing in stolen goods.
(2) The holder of a licence on whom a notice to show cause has been served, a person with whom, pursuant to section 19 (2), the holder of the licence carries on, in partnership, the business to which the licence relates or, where the holder is a body corporate, a director or officer of the body corporate may, within the period specified in the notice, make submissions, orally or in writing, and adduce evidence with respect to the matters to which the notice relates.
(2A) The holder of a licence on whom notice to show cause has been served under this section may not surrender the licence unless the Director-General has made a determination under section 20E in relation to each matter to which the notice relates.
(3) The Director-General may conduct such inquiry or make such investigation in relation to the matters to which the notice relates and the submissions made, if any, and the evidence adduced, if any, by or on behalf of the holder of the licence in relation to those matters as the Director-General thinks fit.”
“20E Determination of disciplinary measures by the Director-General
(1) If, after compliance with section 20D, the Director-General is satisfied that any matter referred to in section 20D (1) has been established, the Director-General may do any one or more of the following:
(a) reprimand the holder of the licence,
(b) require the holder of the licence to comply within a specified time with a requirement specified by the Director-General,
(c) suspend the licence for a period not exceeding 12 months,
(d) disqualify the holder of the licence or any person concerned in the direction, management or conduct of the business to which the licence relates from holding a licence or from being concerned in the direction, management or conduct of a business for the carrying on of which a licence is required, either permanently or for such period as the Director-General thinks fit,
(e) impose a condition or restriction to which the licence shall be subject,
(f) cancel the licence.
(1A) Without limiting the powers conferred by subsection (1), among the requirements that the Director-General may specify under subsection (1) (b) is a requirement that the holder of the licence concerned:
(a) make an additional contribution to the Fund of such amount as the Director-General specifies, or
(b) indemnify the Fund to such extent as the Director-General specifies in the event of a particular contingency arising concerning the activities of the holder of the licence.
(1B) Despite subsection (1), the Director-General must cancel the licence concerned if satisfied that:
(a) a matter referred to in section 20D (1) (d1) has been established, or
(b) in the case of a licence holder that is a body corporate, if the body corporate were not the holder of a licence, the Director-General would be required by section 12 (4) (k) to refuse an application by the body corporate for a licence.
(2) Where, under subsection (1), the Director-General requires the holder of a licence to comply with a requirement specified by the Director-General, the holder of the licence shall comply with the requirement within the time specified by the Director-General under that subsection.
(3) Where the Director-General disqualifies the holder of a licence under subsection (1) (d), the Director-General shall cancel the licence.
(4) Where the Director-General suspends or cancels a licence under this section, the suspension or cancellation shall take effect on and from such day as is determined by the Director-General and notified, by notice in writing, to the holder of the licence.
(5) Where the Director-General:
(a) suspends a licence--the holder of the licence, or
(b) cancels a licence--the former holder of the licence,
shall return the licence to the Director-General within a period specified by the Director-General when suspending or cancelling the licence.
(6) A person disqualified under subsection (1) (d) shall not, while disqualified:
(a) hold a licence, or
(b) be concerned in the direction, management or conduct of a business for which this Act requires a licence to be held.”
“20F Reviews by the Administrative Decisions Tribunal
(1) If the Director-General:
(a) refuses to grant an application for, or suspends or (under any provision of this Act) cancels, a licence, or
(b) imposes a condition or restriction under section 14, or
(c) imposes a disqualification referred to in section 20E (1) (d),
the applicant for the licence, the person who held the licence or the person disqualified (as the case may be) may apply to the Administrative Decisions Tribunal for a review of the decisions of the Director-General.
(2) On an application for a review of a decision of the Director-General to refuse to grant a licence to a person because of a fact referred to in section 12 (3) or (5), the Administrative Decisions Tribunal may determine that the fact should be ignored on one or more of the following grounds:
(a) the triviality of the acts or omissions giving rise to the offence concerned,
(b) the time that has passed since the offence concerned was committed,
(c) the subsequent good behaviour of the offender,
(d) any other ground prescribed by the regulations.”
8 The applicable provisions of the Administrative Decisions Tribunal Act 1997 (“the ADT Act”) are as follows:
- “55 When can an application for a review be made?
(1) A person may apply to the Tribunal for a review of a reviewable decision only if:
(a) the application is made by an interested person, and
(b) an internal review is taken to have been finalised under section 53 (9), and
(c) the application is made in the manner prescribed by the rules of the Tribunal, and
(d) the application is made within such period as may be prescribed by the rules of the Tribunal following the date on which the internal review is taken to have been finalised under section 53 (9).
Note: Section 4 defines interested person to mean a person who is entitled under an enactment to make an application to the Tribunal for an original decision or a review of a reviewable decision (as the case may be).
(2) However, subsection (1) (b) or (d) does not prevent a person from making an application in respect of a reviewable decision that has not been the subject of an internal review under section 53 if the Tribunal is satisfied that:
(a) the person was not at any time entitled to apply for an internal review of the decision, or
(b) the person made a late application for an internal review in circumstances where the person dealing with the application unreasonably refused to consider the application and the application to the Tribunal was made within a reasonable time following the decision of the administrator concerned, or
(c) it is necessary for the Tribunal to deal with the application in order to protect the person’s interests and the application to the Tribunal was made within a reasonable time following the decision of the administrator concerned.
(3) In determining whether a late application for internal review was unreasonably refused or whether an application to the Tribunal was made within a reasonable time for the purposes of subsection (2), the Tribunal is to have regard to:
(a) the time when the applicant became aware of the making of the decision, and
(b) in a case to which subsection (2) (b) applies - the period prescribed by or under section 53 for the lodging of an application for an internal review, and
(c) such other matters as it considers relevant.”
“60 Operation and implementation of decisions pending applications for review
(1) Subject to this section, an application to the Tribunal for a review of a reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision.
(2) On the application of any party to proceedings for an application for a review of a reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application.
(3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account:
(a) the interests of any persons who may be affected by the determination of the application, and
(b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and
(c) the public interest.
(4) While an order is in force under this section (including an order that has previously been varied on one or more occasions under this subsection), the Tribunal may, on application by a party to the proceedings, vary or revoke the order by another order.”
“63 Determination of review by Tribunal
(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:
(a) any relevant factual material,
(b) any applicable written or unwritten law.
(2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision.
(3) In determining an application for the review of a reviewable decision, the Tribunal may decide:
(a) to affirm the reviewable decision, or
(b) to vary the reviewable decision, or
(c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or
(d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.”
9 In addition to his application for review of the Commissioner’s decision, Mr Flanagan also sought a stay of that decision. The matter of the stay came before me on 17 May 2004. At that time I was satisfied that Mr Flanagan's application to the Tribunal was made within a reasonable time following the Commissioner’s decision and I determined that it was necessary for the Tribunal to deal with the application in order to protect Mr Flanagan's interests. I also determined that the Commissioner's decision should be stayed in order to secure the effectiveness of the determination of the application.
10 Accordingly, the Tribunal has jurisdiction to determine this matter. The Tribunal undertakes a review of the merits of the original decision, with the obligation to reconsider all the material first considered, together with any further relevant material, so as either to confirm the original decision, vary it, or set it aside and substitute another. “The duty of the Tribunal is to satisfy itself whether a decision in respect of which an application for review is duly instituted is a decision which in its view was objectively the right one to be made” (Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 77).
11 These are not adversarial proceedings in which Mr Flanagan carries an onus of proof. Mr Flanagan, by making the application, triggers a process of merits review by the Tribunal. Mr Flanagan does not take on the responsibility of having to prove a case, nor does he cause the Commissioner to have to prove a case. Mr Flanagan and the Commissioner are before the Tribunal as parties by virtue of section 67(2) of the ADT Act.
Mr Flanagan's case
12 Mr Hall appeared on behalf of Mr Flanagan. He relies on the material supplied to the Commissioner in relation to the Notice to Show Cause. This material included a number of testimonials provided on Mr Flanagan’s behalf by local Motor traders familiar with Mr Flanagan's business on a day to day basis. Those testimonials are:
- (a) Paul Arbuckle, Proprietor "Max Auto Smash Repairs" dated 11 November 2003;
(b) Brian Mudge, Manager, "South Tweed Autos Smash Repairs Pty Ltd dated 13 November 2003:
(c) Sam Hurley, Proprietor, "Firestorm Motorcycles", Undated;
(d) Dale Youd, Proprietor, "The C. V Joint Specialists" dated 14 November 2003.
13 Mr Flanagan is a qualified motor mechanic, however he had no prior industry experience in the conduct and administration of a Motor Wrecking business. He purchased the business over the Christmas New Year period 2002-3 and though he had received only minimal training, he obtained the necessary licence over the period of the purchase contract and he commenced business as a sole trader.
14 It is common ground that Mr Flanagan pleaded guilty to a charge of ‘Receiving etc goods stolen out of New South Wales’ pursuant to section 189A(l) of the Crimes Act 1900. The offence was dealt with summarily by the Local Court at Tweed Heads and Bond to be of Good Behaviour for two years was imposed. Mr Flanagan concedes that this is a case involving dishonesty. Mr Flanagan also accept that there were further breaches of the Act identified by a detailed audit of his business conducted by inspectors of the Office of Fair Trading, and Local Police. Mr Flanagan co-operated fully with these investigations that proceeded over three days at his place of business and he made full and frank admissions as to his conduct.
15 The Act breaches were dealt with at the same time as the criminal offence by voluntary plea entered at Mr Flanagan's first opportunity. The Court imposed fine penalties for these offences. Mr Flanagan paid the fines immediately.
16 Mr Hall provided submissions in support of Mr Flanagan’s application. He submitted that most of Mr Flanagan’s offences might be said to be administrative failures. One breach resulted from sales of single 'whole' vehicles in August, September and October of that year without the required licence.
17 On behalf of his client Mr Hall concedes that at the time of the above offences Mr Flanagan's record keeping was "shambolic". He submits, however, that since the time of the offences, and particularly at the time of the Show Cause Notice; Mr Flanagan has employed staff experienced in the industry and in the necessary administration. Mr Flanagan has established regulatory compliance procedures of a reasonable standard.
18 At the hearing the Commissioner alleged continuing regulatory breaches. This was evidenced by the outcome of an audit inspection conducted the day prior to hearing by Mr James Wright, Team Leader of the OFT Licensee Investigations Unit and Mr Troy Anderson, an OFT Investigator. Mr Flanagan concedes some of these alleged breaches, but asserts that some of the allegations of breaches are unfounded as the invoices refer to resales of manufactured parts and therefore are not subject to the record keeping regime as alleged.
19 Mr Hall submitted that, in any event, Mr Wright, he conceded that in his opinion, Mr Flanagan's record keeping and compliance was not the worst, nor was it the best he had en encountered in his long experience. Mr Hall argues that this implies that Mr Flanagan's current practice is consistent with main stream industry standards.
20 Mr Hall accepts that a conviction for an offence involving dishonesty is a valid matter for consideration by the Commissioner. However, it is submitted that the conviction itself is not a conclusive determinate of Mr Flanagan's character. He argues that the indicia of dishonesty should be viewed in the matrix of surrounding circumstances, and the history of Mr Flanagan so as a reasonable and complete appreciation of the integrity of the person may be assessed. In this regard, the offence should be seen as an aberration.
21 He submitted that it was a unique event that is outside Mr Flanagan's usual good character. No other criminal or dishonest act of Mr Flanagan has been discovered or alleged in the 18 months of Mr Flanagan's business affairs. There is absolutely no evidence of any consistent conduct of dishonesty by Mr Flanagan. There has been no recorded consumer or trader complaint involving Mr Flanagan prior to, or subsequent to, the single dishonest offence committed by Mr Flanagan. Therefore, the weight given to the conviction should be discounted.
22 It is submitted that the Commissioner’s determination was incorrect in that at the time of the decision Mr Flanagan and his staff exercised a reasonable standard of competence in the requisite knowledge and ability to comply with the licence requirements. Mr Flanagan's continuing good character had been evidenced by his full and frank admissions and acceptance of his wrong doings. His initial and continuing co-operation with authorities and his specific efforts to improve compliance procedures are indicia of his bona fides and integrity. Acknowledgment of these positive factors and weight should have been given to the judicial sanctions imposed in respect of Mr Flanagan’s former actions. He further submitted that a reprimand was in order or, in the alternative, to adjourn the determination pending the resolution of the existing Court orders, and so allow an extended consideration of Mr Flanagan's character. The breaches of the Act are matters that can and should be dealt with through prosecution of specific breaches.
23 In the alternative, Mr Hall submitted if the Commissioner was correct to cancel Mr Flanagan's licence, then the period of disqualification as determined, is harsh and unjust in the circumstances. It will cause personal hardship disproportionate to his crime which has already been dealt with by way of a Judicial penalty. If Mr Flanagan's licence is cancelled, then it is submitted that no disqualification period should be imposed on him in the circumstances.
The Commissioner’s case
24 Mr Coss appeared on behalf of the Commissioner. Mr Wright and Mr Anderson each provided statements and each appeared to give evidence at the hearing and were subjected to cross-examination. Each gave evidence of the audit of Mr Flanagan's premises on the day before the hearing and identified continued breaches of the Act. Their evidence is that they undertook a sample audit and detected some sixteen parts and one whole vehicle that were in breach but that numerous other breaches could have been identified if the audit had continued.
25 Mr Coss provided written submissions, which provide a reasonable summary of the Commissioner’s case. In part Mr Coss’s submissions are:
- “8. Whilst the Applicant’s solicitor agrees that the Applicant’s compliance with statutory record keeping initially was “shambolic” it is now asserted that he has dedicated staff to ensure compliance. Even if the Applicant employs dedicated staff to “handle the recording and compliance duties of the business”; there is no guarantee that the staff will stay. The Applicant is responsible for knowing what his obligations are under the Act and Regulations. The responsibility for compliance rests with the Applicant and this is at the very core of the problem.
9. An inspection was carried out on 14 July 2004 of the Applicant’s premises. One would have expected the records to comply fully with the Act and Regulation. Instead what was found was that the Office can have no confidence in the compliance by the Applicant of his statutory obligations.
10. The Office relies on the Statement of James Earnest Wright dated 14 July 2004. Mr Wright on inspecting the premises noted that a number of prescribed parts were not marked in accordance with the Act. Mr Wright asked Mr Anderson to photograph these parts and this was subject to a separate statement.
11. Mr Wright was given the prescribed registers the Form 2A and 2B registers for the business by the Applicant. Mr Wright then compared the receipts for the sale of prescribed parts. Although on electronic format, a hard copy was produced of some of the receipts. Mr Wright noted two non-complying aspects to these receipts. Firstly, Mr Wright noted that some of these receipts for prescribed parts did not have an entry number recorded on the receipts. Secondly, Mr Wright compared some of the receipts that had entry numbers on the receipts and noted that the parts were not shown as sold in the 2A Register. The net effect of this was that the parts sold were virtually untraceable and clearly show a continuing lack of knowledge by the Applicant concerning the operations of the Act and his responsibilities. It is conceded that only a couple of the receipts were for new after market parts although this was not clearly indicated on the receipts. The Applicant conceded that in respect of the rest of the receipts he had failed to record entry numbers on the receipts.
Mr Wright’s comment that the “Applicant’s record keeping and compliance was not the worst, nor was it the best in his experience” in no way can be construed to be that the Applicant’s record keeping and compliance does comply with the Act. It was a comment in context of the numerous investigations Mr Wright has completed on non-compliance with the Act and certainly was not an endorsement of the Applicant’s past and present practices. Put simply, if the Applicant was complying a statement would not have been produced by Mr Wright nor would he have instructed Mr Anderson to photograph sixteen parts that graphically demonstrate continuing non-compliance with the Act and Regulation.
12. Mr Wright asked the Applicant about the sixteen prescribed parts that were not marked that are evidenced in photographs contained in the statement of Troy Anderson of 14 July 2004. An auto-dismantler is required to mark a prescribed part by copying onto the part by means of an indelible marking substance, the entry number in the auto-dismantler’s register that relates to the part. The Applicant was shown the sixteen prescribed parts that had been not marked by Mr Wright. On each occasion except one the Applicant agreed the parts were not marked and had no explanation as to why they were not marked. The marking of prescribed parts is important in the ability of Police to trace stolen vehicles and parts. The failure to mark parts through oversight or inability to understand the importance of complying with this statutory function simply undermines this provision and graphically demonstrates that the Applicant still shows an inability to comply with his obligations under the Act and Regulation.
13. The Respondent has established that the Applicant under Section 20D(1)(j) is not a fit and proper person to continue to hold a licence. Fit and proper has been held to mean honesty, knowledge and ability Hughes and Vale Proprietary Limited v State of New South Wales and Others [1955] 93 CLR 127. The Respondent relies on the material filed and served.
14. There is only one standard of honesty, a person is honest or he is not: Sakellis v Officer in Charge of Police Paddington (1968) 88 WN (PT 1)(NSW). It is not disputed that the Applicant was convicted of receiving stolen property and currently on a good behaviour bond until 5 January 2005. The Applicant is expected to conduct his business honestly at all times and there is no provision in the Act for “one-offs”. Under the present regulatory scheme if the Applicant was not licensed and instead was applying for a licence, such a licence would be refused under section 12(2)(i)(ii) of the Act being “the applicant has (as an adult), within the proceeding 10 years, been found guilty of an offence involving, or relating to:
- (ii) receiving, or unlawful possession of, a motor vehicle (within the meaning of section 154AA of the Crimes Act 1900 ) or a motor vehicle part.”
15. The Applicant has shown over a considerable period of time that he still not fully aware of the legislation under which he operates. A licence granted under the Act is meant to give consumers confidence that the licensee is knowledgeable of conducting the business to which the licence relates. The purpose is consumer protection. The Licensee must ultimately take responsibility for the proper conduct of his business and to appraise himself of his statutory obligations.
16. The Applicant has clearly demonstrated that he simply does not have the ability to meet his statutory obligations under the Act and Regulation. It’s simply beyond him and the Commissioner cannot be confident that the Applicant will obtain the ability to meet his statutory obligations under the Act and Regulation.
The Act is protective not punitive. Subjective matters cannot overtake the public interest Jasmin v Commissioner of Police NSW police Service [2001] NSWADT 45.
Therefore the matters raised by the Applicant’s submissions at paragraphs 9, 10, 11, 12, 13, 14 are irrelevant to the determination made. Under the Act, there is no matrix of surrounding circumstances. The disqualification was appropriate.
- In the Second Reading Speech of the revised Act the Minister said in part “On crime prevention measures, according to law enforcement agencies car rebirthing is a growing source of criminal activity.
The insurance industry has estimated that this year car theft will cost close to $1 billion, with the cost to New South Wales alone estimated at $388 million. The total cost of rebirthing in New South Wales is estimated at $156 million, which is 70 per cent of the national cost. This affects the public through loss of vehicles, higher insurance premiums and innocent consumers having their vehicles seized by police. Both the Motor Dealers Act and the Motor Vehicle Repairs Act have a significant role to play in the Government’s comprehensive plan to crack down on this source of criminal activity. One of the ways in which the bill does this is by tightening entry requirements for licensed dealers and repairers. Licences can already be refused on the grounds that the applicants are generally not fit and proper persons.
However, the bill goes further so that a person convicted of stealing motor vehicles or motor vehicle parts, receiving a stolen motor vehicle or motor vehicle parts, unlawful possession of stolen motor vehicles or motor vehicle parts will be barred from a holding a licence. The prohibition will last 10 years from the date of conviction, which is consistent with the spent conviction provisions of the Criminal Records Act 1991 and existing probity timeframes in the dealers Act. There will be ongoing monitoring of convictions. Dealers and repairers will also be required to lodge annual statements disclosing any criminal convictions. Furthermore, if there is evidence that a dealer or repairer is probably receiving or dealing in stolen goods, they will be asked to show cause as to why their licence should not be revoked.”
26 Mr Coss submits that in all the circumstances, the Tribunal should affirm the Commissioner’s delegate’s decision.
Findings
27 I am in general agreement with the Commissioner in relation to the significance of Mr Flanagan's conviction and continued breaches. In my view, it is integral to the regulation of the auto-dismantling industry that audit trails exist so that the Commissioner’s staff and police are able to trace the source of parts. I do not agree with Mr Hall’s classification of Mr Flanagan’s breaches as administrative failures. In my view they represent a failure to establish the audit trails. They also show that Mr Flanagan is still not fully aware of the purpose or the requirements of the legislation under which he operates. A licensee must ultimately take responsibility for the proper conduct of his business and to appraise himself of his statutory obligations.
28 Notwithstanding that view, I note that there are three arms to the Notice to Show Cause. The first arm deals with Mr Flanagan’s conviction for receiving stolen property. The second arm deals with offences against the Act and the third arm asserts that Mr Flanagan is not a fit and proper person to continue to hold a licence. There is no doubt that the first two arms have been proven.
29 The expression "fit and proper" has been considered in a number of cases. The leading case of Hughes and Vale v. The State of New South establishes that the three characteristics of "fit and proper" are honesty, knowledge and ability.
30 The authorities on the concept "fit and proper person" were usefully summarised by the Commercial Tribunal in Young Taek Chong v Tomazin (1994) ASC 56-283 at page 58:
- "The words "fit and proper" are also wide. Character, suitability and fitness are ingredients ... Integrity and trustworthiness are required: The concept extends to any aspect of fitness of propriety that is relevant to the public interest …
Nevertheless, the question is not whether the Applicant is a fit and proper person. The question is whether the Applicant is a fit and proper person to hold the particular licence: The question of fitness is not at large but is directed to the purpose of regulatory regime: New Broadcasting Limited v Australian Broadcasting Tribunal: Treasure (1987) 73 ALR 420. Further, in this context the answer must depend upon one's conception of the minimum standards demanded or required [for the profession in question]: Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 189: See also Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 per Kitto JJ at 298 and Law Society of New South Wales v Moulton (1981) to New South Wales Law LR 736 per Hutley JA at 750. The ultimate question is whether the applicant can be safely accredited to the public without further enquiry as a person being trusted with the sort of work which the licence entails ...”
31 The purpose of the Act is to protect the public. Mr Flanagan’s cooperating with the authorities and attempts to comply with the legislative requirements after his convictions must be taken into account. Nevertheless, subjective matters cannot overtake the public interest. Mr Hall’s submissions with respect to the subjective matters assume incorrectly that an order made by the Tribunal is a punitive one. The purpose of an order is to protect the public. The interest of Mr Flanagan’s continuing in business must be weighed against the desirability of protecting the public from any repetition of the conduct exhibited in this case.
32 The licensing of a person as an auto-dismantler under the Act means that the person can be held out to the public as being not only possessed of acceptable expertise, but as a person of integrity and honesty. Members of the public must have confidence in auto-dismantlers. It is not relevant whether individual consumers would expect that the quality of their products would be high or low. The public must have confidence in their honesty. Consumers must be sure that the confidence they place in a licence holder is not abused. They should be able to assume that auto-dismantlers adhere to proper standards of trust and honesty.
33 The authorities show that evaluation of fitness involves a wide discretion and must be determined with reference to the particular purposes of the regulatory regime involved. Account must be taken of the minimum standards of the profession or occupation being regulated. Matters such as ‘character’, ‘suitability’, ‘integrity’ and ‘trustworthiness’ – indeed, ‘any aspect of fitness or propriety that is relevant to the public interest’ – must be considered.
34 While an isolated act may suffice to show lack of fitness and propriety, this will not necessarily be the case, and ‘deliberate prolonged conduct or a course of conduct’ stands on a different footing: New South Wales Bar Association-v-Evatt (1968) 117 at 183; Ziems-v-Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279 at 298. Character evidence may be relevant, but each case must be assessed on its own particular circumstances.
35 It is my opinion that Mr Flanagan falls into the latter class of cases. His conduct in receiving a stolen vehicle was intentional. It appears however to be out of character. Nevertheless, his conduct in operating his business in a manner that fails to meet the standard required by the Act has extended over a period of time. It follows, therefore, that time should provide the most appropriate test for rehabilitation in the present circumstances. In my view, a two-year unblemished record would be an illustration of this.
36 It is my view that the Commissioner’s determination to cancel Mr Flanagan’s licence is the correct and preferable decision. However, I do not agree that the decision to disqualify him from holding a licence under the Act for seven years is warranted. In my view, Mr Flanagan should be disqualified from holding a licence under the Act for two years.
Orders
- 1. The Commissioner’s determination to cancel Mr Flanagan’s licence is affirmed.
2. The Commissioner’s determination to disqualify Mr Flanagan from holding a licence under the Act for seven years is set aside. In its place the order is made that Mr Flanagan is disqualified from holding a licence under the Act for two years.
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