Frugtniet and Anor v Commissioner for Fair Trading; Commissioner for Fair Trading v Travel Action Pty Ltd and Anor (GD) - [2004] NSWADTAP 12

Appeal Panel - Internal

CITATION: Frugtniet and Anor v Commissioner for Fair Trading; Commissioner for Fair Trading v Travel Action Pty Ltd and Anor (GD) [2004] NSWADTAP 12

PARTIES: APPELLANT:
Brian Frugtniet; Suzanne Frugtniet
RESPONDENT
Commissioner for Fair Trading
APPELLANT
Commissioner for Fair Trading
RESPONDENT
Travel Action Pty Ltd; Sascha Frugtniet

FILE NUMBER: 039074,039075, 038076, 039077

HEARING DATES: 19/02/2004-20/02/2004

SUBMISSIONS CLOSED: 02/20/2004

DATE OF DECISION:
04/16/2004

DECISION UNDER APPEAL:
Travel Action Pty Ltd; Sascha Frugtniet; Suzanne Frugtniet and Brian Frugtniet v Commissioner for Fair Trading [2003] NSWADT 2223

BEFORE: Chesterman M - ADCJ (Deputy President); Montgomery S - Judicial Member; Antonios Z - Member

CATCHWORDS: admissibility of evidence - finding contrary to evidence - penalty - manifestly inadequate - procedural fairness - relevant/irrelevant considerations - standard of proof - statutory interpretation

MATTER FOR DECISION: Principal matter

FILE NUMBER UNDER APPEAL: 023209, 023230, 023231, 023232

DATE OF DECISION UNDER APPEAL: 09/24/2003

LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Evidence Act 1995
Migration Act 1958 (Cth)

CASES CITED: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 1
Briginshaw v Briginshaw (1938) 60 CLR 336
Browne v Dunn (1893) 6 R 67
Commissioner for Fair Trading v Travel Action Pty Ltd [2003] NSWADTAP 69
Devries v Australian National Railways Commission (1993) 177 CLR 472
Galea v Galea (1990) 19 NSWLR 263
Health Care Complaints Commission v Pham [1999] NSWCA 39
Hope v Council of the City of Bathurst (1980) 144 CLR 1
House v King (1936) 55 CLR 499
Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127
Jones v Dunkel (1959) 101 CLR 298
Lloyd v TCN Channel Nine Pty Ltd [1999] NSWADTAP 3
Manila Marketing Pty Ltd v Travel Compensation Fund, Unreported, Commercial Tribunal of NSW, 27 March 1995 (No. 1116 of 1993)
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Re Minister for Immigration and Multicultural Affairs Ex Parte Applicant S154/2002 [2003] HCA 60
Muralidharan v MIEA (1996) 62 FCR 402
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1993) 67 ALJR 170
Sabag v Health Care Complaints Commission [2001] NSWCA 411
Secretary of the Department of Veterans' Affairs v Studdert [2001] FCA 1642
Travel Action Pty Ltd; Sascha Frugtniet; Suzanne Frugtniet and Brian Frugtniet v Commissioner for Fair Trading [2003] NSWADT 223
Vetter v Lake Macquarie City Council [2001] HCA 12
Waterford v Commonwealth (1987) 163 CLR 54
YG & GG v Minister for Community Services [2002] NSWCA 247
Young Taek Chong v Tomazin (1994) ASC 56-283

REPRESENTATION: APPELLANT
R Frugtniet, agent for Brian and Suzanne Frugtniet
APPELLANT
G Elliott, barrister, for Commissioner for Fair Trading
RESPONDENT
G Elliott, barrister, for Commissioner for Fair Trading
RESPONDENT
R Frugtniet, agent for Travel Action Pty Ltd & Sascha Frugtniet

ORDERS: Each appeal is dismissed

The nature of the proceedings under appeal

1 In these proceedings, applications were made to the Tribunal for the review of four decisions made by the Director-General, Department of Fair Trading, pursuant to s 21 of the Travel Agents Act 1986 (‘the TA Act’). The Director-General is now the Commissioner for Fair Trading, though the TA Act still describes this office as ‘the Director-General’. Except when quoting from the legislation, we shall follow the Tribunal in referring to it as ‘the Commissioner’.

2 The decisions related to the four Applicants. They were Travel Action Pty Ltd (‘Travel Action’), a licensed travel agency; Mr Sascha Frugtniet, the sole director of Travel Action; Sascha Frugtniet’s mother, Ms Suzanne Frugtniet; and his father, Mr Brian Frugtniet. Although the Commissioner made a single independent decision in relation to each Applicant, the Tribunal reviewed all four decisions in a single hearing and delivered a single judgment (Travel Action Pty Ltd; Sascha Frugtniet; Suzanne Frugtniet and Brian Frugtniet v Commissioner for Fair Trading [2003] NSWADT 223).

3 The decisions of the Commissioner under review in relation to Suzanne Frugtniet and Brian Frugtniet were that they should be permanently disqualified from being involved in the direction, management or conduct of business as travel agent or holding a licence issued under the Travel Action. The ground, set out in s 20(1)(i) of the TA Act, was that each of them, being a person (other than the corporate licensee) involved in the direction, management or conduct of a business to which the licence related, was not ‘a fit and proper person to be so involved’.

4 The decision under review in relation to Sascha Frugtniet was that he should be disqualified for ten years from being involved in the direction, management or the conduct of business as travel agent or holding a licence issued under the Travel Action. The ground once again was that he, being a person (other than the corporate licensee) involved in the direction, management or conduct of a business to which the licence related, was not ‘a fit and proper person to be so involved’.

5 The decision under review in relation to Travel Action was as follows:-

To cancel licence No 2TA001406 and that the corporate licensee be disqualified for a period of 10 years from 27 September 2002 from holding a licence issued under the Act.

6 This decision was based on three grounds set out in s 20(1) of the TA Act. These were that Travel Action had failed to comply with the Act (s 20(1)(c)); that it did not have, or was not likely to continue to have, sufficient financial resources to enable it to continue to carry on business as a travel agent (s 20(1)(e)); and that Suzanne Frugtniet and Brian Frugtniet, being persons (other than the corporate licensee) involved in the direction, management or conduct of a business to which the licence related, were not fit and proper persons to be so involved (s 20(1)(i)).

7 In its judgment, the Tribunal upheld the decisions in relation to Suzanne Frugtniet and Brian Frugtniet, but set aside the other two decisions of the Commissioner. Its reason for setting aside the decision in relation to Sascha Frugtniet was that the evidence did not support a finding that he was not a fit and proper person to be involved in the direction, management or conduct of the business of a travel agent. In substitution for the decision relating to Travel Action, the Tribunal decided that Travel Action should be reprimanded for failing to comply with the TA Act. It made orders implementing these conclusions.

8 Each of the conclusions was based on factual findings made by the Tribunal. In making these findings, it endorsed some but not all of the factual allegations brought forward by the Commissioner.

9 It was common ground throughout these appeals that at relevant times Sascha Frugtniet had been involved in the direction, management or conduct of Travel Action and that Suzanne Frugtniet and Brian Frugtniet had both been involved in the conduct, though not the direction or management, of Travel Action.

The nature of these appeals

10 Suzanne Frugtniet and Brian Frugtniet both appealed against the orders made against them. Their grounds of appeal included challenges to the Tribunal’s findings of fact, to the conclusions reached by it in reliance on its findings and to the validity of various procedural steps taken by the Commissioner and by the Tribunal.

11 The Commissioner appealed against the orders made in relation to Sascha Frugtniet and to Travel Action. Its grounds of appeal included claims that the Tribunal (a) took irrelevant considerations into account; (b) failed to take relevant considerations into account; (c) erred in the application of a statutory criterion; and (d), in the case of Travel Action, imposed a manifestly inadequate penalty.

12 Each of the Appellants asserted that the Tribunal had made errors of law. They also sought leave for their appeal to extend to the merits. In addition, the Commissioner sought leave to appeal out of time.

13 In taking these steps, the parties were responding to statutory limits placed on appeals to this Panel. These are set out in the following terms in s 113(1)-(3) of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’):-

113 Right to appeal against appealable decisions of the Tribunal

(1) A party to proceedings in which an appealable decision of the Tribunal is made may appeal to the Tribunal constituted by an Appeal Panel.

(2) An appeal under this Part:

(a) may be made on any question of law, and

(b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision.

(3) An appeal under this Part must be made:

(a) within 28 days after the Tribunal furnishes the party with written reasons for the appealable decision under section 89, or

(b) within such further time as the Appeal Panel may allow.

14 In a judgment delivered on 22 December 2003 (Commissioner for Fair Trading v Travel Action Pty Ltd [2003] NSWADTAP 69), we granted the leave sought by the Commissioner to appeal out of time.

15 Submissions in all four appeals were put to us at a single hearing. Mr Rudy Frugtniet (‘Mr Frugtniet’) appeared as agent for Suzanne, Brian and Sascha Frugtniet and for Travel Action. The Commissioner was represented by Mr Grant Elliott of counsel.

16 We deal below with each appeal in turn, setting out the details of the submissions and our conclusions. Before doing so, we will set out relevant provisions of the TA Act.

Relevant provisions the Travel Agents Act

17 Relevant parts of four sections of the TA Act should be set out in full. They are ss 20, 21, 22 and 36.

18 So far as relevant, s 20 provides as follows:-

20 Notices to show cause

(1) Where, at any time, the Director-General is of the opinion that there are reasonable grounds for believing that:

. . .

(c) a licensee has failed to comply with this Act, a condition or restriction to which the licence is subject, a requirement under section 21 (1) (b) or an order of the Tribunal applicable to the licensee,

. . .

(e) a licensee does not have, or is not likely to continue to have, sufficient financial resources to enable the licensee to continue to carry on business as a travel agent,

. . .

(i) a person (other than the licensee) involved in the direction, management or conduct of a business to which the licence relates is not a fit and proper person to be so involved,

. . .

the Director-General may, by notice in writing served on the licensee, call upon the licensee to show cause, within such period, being not less than 14 days, as is specified in the notice, why the licensee should not, for such of the reasons referred to in paragraphs (a)–(l) as are specified in the notice, be dealt with in accordance with section 21(1).

. . .

(4) A licensee on whom a notice under subsection (1) has been served, a person with whom the licensee carries on, in partnership, the business to which the licence relates or, where the licensee 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, with respect to the matters to which the notice relates.

(5) A person on whom a notice under subsection (2) (b) has been served may, within the period specified in the notice, make submissions, orally or in writing, with respect to the matters to which the notice relates.

(6) In order to determine:

(a) whether or not to serve a notice under subsection (1), or

(b) whether or not to take action under section 21,

the Director-General may make such investigations as the Director-General thinks fit.

19 Section 21 is as follows:

21 Determination of disciplinary matters by the Director-General

(1) If, after compliance with section 20, the Director-General is satisfied that any matter referred to in section 20 (1) has been established in relation to a licence, a licensee or the business carried on pursuant to a licence, the Director-General may do any one or more of the following:

(a) reprimand the licensee,

(b) require the licensee 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) impose a condition or restriction to which the licence shall be subject,

(e) disqualify the licensee (or, if the licence has been surrendered, the former licensee) in accordance with subsection (2),

(f) where a notice was served on a person under section 20 (2) (b)—disqualify the person in accordance with subsection (2),

(g) except where the Director-General acts in accordance with paragraph (a), (b), (c) or (d)—cancel the licence.

(2) A person is disqualified in accordance with this subsection if either or both of the following disqualifications is or are imposed:

(a) a disqualification from holding a licence,

(b) a disqualification from being involved in the direction, management or conduct of business as a travel agent,

either permanently or for such period as is specified by the Director-General when imposing the disqualification.

(3) Where, under subsection (1) (b), the Director-General requires a licensee to comply with a requirement specified by the Director-General, the licensee shall comply with the requirement within the time specified by the Director-General under that paragraph.

Penalty: 10 penalty units.

(4) Where the Director-General disqualifies a licensee in accordance with subsection (2), the Director-General shall cancel the licence.

(5) 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 served on the licensee.

(6) Where the Director-General:

(a) suspends a licence—the licensee, or

(b) cancels a licence—the former licensee,

shall return the licence to the Director-General within a period specified by the Director-General in the notice served under subsection (5).

Penalty: 10 penalty units.

(7) A person disqualified in accordance with subsection (2) shall not, while disqualified, act in contravention of the disqualification.

Penalty—subsection (7): 50 penalty units.

20 The relevant part of s 22 is subsection (2):-

22 Rights of review by the Tribunal

(1)…

(2) If the Director-General suspends or cancels a licence or imposes a disqualification in accordance with section 21(2), the former licensee or the person disqualified may apply to the tribunal for a review of the decision of the Director-General.

21 Section 36 is as follows:-

36 Supervision of conduct of business

A licensee shall not carry on business as a travel agent unless, at each place at which the licensee so carries on business, there is present and in charge of the day-to-day conduct of the business at that place a person (whether or not the person is the licensee) who has the prescribed qualifications.

Penalty: 10 penalty units.

22 It is convenient to note here that s 6 of the TA Act makes it an offence to carry on business as a travel agent without a licence under the Act and that s 4 sets out a definition of carrying on business as a travel agent. That definition includes selling tickets to members of the public for travel and accommodation. It follows, as the Tribunal pointed out in its judgment at [12], that money for bookings is received from members of the public and must be held on trust.

23 We now turn to consideration of each of the four appeals in turn, taking them in the order in which they are dealt with in the Tribunal’s judgment.

DECISION 1: SUZANNE FRUGTNIET

Failure to disclose convictions in Victoria

24 The decisions of the Commissioner regarding both Suzanne Frugtniet and Brian Frugtniet that were challenged before the Tribunal were made in exercise of the powers conferred under s 21(1)(e) and (f) of the TA Act.

25 The gist of the Tribunal’s finding under this heading was that an answer given on 24 June 2002 by Suzanne Frugtniet to a Notice to Show Cause, served on her under s 20(1)(i) of the Act on 10 June 2002, contained a statement that was misleading. She had thereby indicated, according to the Tribunal at [53], that she was ‘not prepared to be fully frank in her dealings with the Commissioner’.

26 The Commissioner had in fact served an earlier Notice on Suzanne Frugtniet. This occurred on 13 May 2002, but the Notice was withdrawn by a letter dated 7 June 2002. It need not be further considered.

27 The Notice to Show Cause of 10 June 2002 alleged that the Commissioner had reasonable grounds to believe that Suzanne Frugtniet, being a person involved in the direction, management or conduct of Travel Action, was not a fit and proper person to be so involved. The particulars in support of this allegation included the following passage:-

A criminal record search shows that on 11 June 1997, Suzanne Marie Frugtniet was convicted of 2 counts of obtaining benefit by deception and 2 counts of attempt to obtain benefit by deception. The convictions were upheld on appeal on 27 August 1999 and she was placed on a 3 year recognisance with a $3000 bond and ordered to pay a total of $2,192 in compensation.

28 The formal response by Suzanne Frugtniet under s 20(5) of the TA Act included the following passage, quoted in the Tribunal’s judgment at [50]:-

Duplicitous. Abuse of process – I adopt the affidavits and submissions filed in the ADT proceedings 023100. This is a matter of record. The circumstances occurred in January 1995, some 7 years ago and the matter is stale. I have since been gainfully employed in the most reputable law firm in this country and I have undertaken several charitable activities and assisted persons less fortunate than myself.

29 A further passage in the response, not quoted in this judgment, was as follows:-

I have been gainfully employed for several years now in very reputable law firms in the city and am currently employed by the No. 1 law firm in the country and within the top 10 in the world as voted by various Global awards particularly in the Asia Pacific Region.

30 Immediately following this passage, the response referred to Suzanne Frugtniet’s charitable activities, adding that she had been involved with pro bono work, with mentoring of legal secretaries and with the training of law clerks and law graduates.

31 The grounds on which the Tribunal found the response set out above at [28] to be misleading derived from its failure to mention two convictions and a resulting prison sentence in Victoria. On 24 June 1998, the County Court of Victoria convicted her of the offences of conspiring to make false documents and using false documents, namely, counterfeit American Express travellers’ cheques. These offences related to activities occurring during the period from October to December 1991. The Court sentenced her to imprisonment for two years, with a minimum term of 12 months. Her appeal to the Victorian Court of Appeal was dismissed. She served about 12 months in prison and was released in mid July 1999.

32 The Tribunal accepted Suzanne Frugtniet’s argument that because s 20(5) of the TA Act only envisages a response ‘with respect to the matters to which the notice relates’, she had not been required to disclose adverse information such as the Victorian conviction. But it nonetheless determined, at [53], that ‘the way in which she worded her response was misleading’. It explained this ruling as follows:-

To say that she has “since been gainfully employed” suggests that she has been gainfully employed since her NSW convictions. That is not the full story. Suzanne Frugtniet has also been in gaol since those convictions. Her response indicates that she in not prepared to be fully frank in her dealings with the Commissioner.

33 It should be noted here that, in contrast to the Tribunal, the Commissioner, in determining under s 21(1)(f) that Suzanne Frugtniet should be disqualified, did not refer to her failure to disclose the Victorian convictions or suggest that on account of such failure or for any other reason this part of her response to the Notice to Show Cause was misleading.

34 Mr Frugtniet put forward three grounds of appeal in relation to this finding of the Tribunal. We will outline each of them in turn, setting out also the submissions made by Mr Elliott for the Commissioner and our own conclusions.

35 Mr Frugtniet’s first argument was that the statutory requirements set out above prohibited the Commissioner, when proceeding under s 21 of the TA Act, from relying on matters that had not been raised in the Notice to Show Cause served under s 20. This followed from the ‘pivotal’ provision in s 20(4) and (5) that the recipient of a Notice may make submissions ‘with respect to the matters to which the notice relates’. This conclusion was not displaced by the wording of s 20(6)(b), which conferred broad investigative powers on the Director-General for the purpose of determining whether to take action under s 21.

36 In response, Mr Elliott maintained that the effect of s 20(6)(b) was to put it beyond doubt that the Commissioner, when deciding whether to take one or more of the steps listed in s 21(1) and (2), could rely on material discovered through investigations that went outside the range of matters specified in the Notice to Show Cause. While the opening words of s 21(1) made it clear that the service of a Notice was a pre-requisite to taking action under this subsection, neither this provision nor any other provision of the TA Act confined the range of matters on which such action was based to the matters set out in the Notice. Additional matters could be relied upon so long as the requirements of natural justice were observed.

37 Mr Elliott submitted further that, whether or not this line of argument was correct in relation to action taken by the Commissioner under s 21, it was clearly established that the Tribunal, in exercising the powers of review conferred by s 22(2), was bound to take into account all the relevant material put before it. This would frequently embrace matters that had not been raised in the Notice to Show Cause. If, for instance, the Commissioner, acting under s 21(1)(f), had disqualified a person involved in the conduct of a licensed business on the ground that he or she was not fit and proper to be so involved, and the Tribunal found the person to have been untruthful in giving evidence at the review hearing, it could and indeed should take this into account in deciding that the disqualification was justified.

38 In making this submission, Mr Elliott relied on the following words in s 63(1) of the ADT Act:-

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…

39 He cited the judgment of Hodgson JA (with which Foster AJA and Brownie AJA agreed) in YG & GG v Minister for Community Services [2002] NSWCA 247 at [25]. Referring to s 63(1), his Honour stated that on a merits review by the Tribunal or by an Appeal Panel, ‘the issue for determination is what is the correct and preferable decision at the time of the determination, irrespective of whether it was or was not the correct and preferable decision at the time it was originally taken’.

40 Mr Elliott addressed also the question whether the requirements of natural justice had been observed in the present case. He submitted that the ground on which the Tribunal had found Suzanne Frugtniet’s response to the Notice to Show Cause to be misleading had been sufficiently notified to her before the conclusion of the review hearing and she had had a sufficient opportunity at the hearing to make her own submission on the matter. The fact that the Commissioner had become aware of the Victorian convictions was made clear to Suzanne Frugtniet in a document served on her before the hearing. The basis on which the Commissioner claimed that her response was misleading was put to her in cross-examination. It also formed part of the closing submissions of the Commissioner, which were in writing. Finally, the written submissions on her behalf included a response to the relevant passage in the Commissioner’s submissions.

41 In reply to a claim by Mr Frugtniet that this aspect of the Commissioner’s case at the Tribunal should have been included in the particulars served by the Commissioner, Mr Elliott cited a statement of Sperling J (with Beazley JA agreeing) in Sabag v Health Care Complaints Commission [2001] NSWCA 411. This decision of the Court of Appeal concerned medical disciplinary proceedings. At [116], Sperling J said that in this context, ‘where an issue has emerged at the trial and has been litigated, it is no objection that the issue was not notified before trial’. In the judgment of Davies AJA, this principle was also stated, though he disagreed with Sperling J and Beazley JA on its application to the facts of the case.

42 In its judgment in the present case, at [27 – 30], the Tribunal also addressed this issue of procedural fairness, referring specifically to the Commissioner’s assertion that Suzanne Frugtniet (and also Brian Frugtniet) should have disclosed criminal convictions in response to the Notice to Show Cause. It ruled that, although the proceedings were not disciplinary in the strict sense, it was bound to afford procedural fairness to the parties. It concluded that it had done so, observing as follows at [30]:-

The applicants were given every opportunity at the hearing to respond to the allegations which were not detailed in the Notices to Show Cause. In fact the applicants admitted that they comprehensively addressed those issues.

43 In our judgment, the appeal on this ground must fail. We accept some, though not all, of the arguments put by Mr Elliott. Our reasons are as follows.

44 A careful reading of ss 20 and 21 of the TA Act discloses that, while the service of a Notice to Show Cause in accordance with s 20(1) is a prerequisite to the taking of any action under s 21(1) and (2), it is not stated or implied that only the matters set out in the Notice can provide the foundation for such action. The words in s 20(4) and (5) on which Mr Frugtniet strongly relied – ‘with respect to the matters to which the notice relates’ – do not have this effect. They relate to a step that the recipient of a Notice may, but need not, take pursuant to one or other of those subsections. There is no reason to interpret them as implicitly restricting the range of matters that may be relied on by the sender of a Notice in determining whether or not to take a step authorised by a different section of the Act.

45 If this interpretation were correct, the phrase ‘such investigations as the Director-General thinks fit’ in s 20(6) would have to be read as if the words just quoted from s 20(4) and (5) – ‘with respect to the matters to which the notice relates’ – immediately followed it. This is a highly artificial result of itself, but worse is to follow. These limiting words could necessarily apply only to investigations conducted by the Commissioner for the second of the two purposes stated in subsection (6), that is, in order to determine whether or not to take action under s 21. It would be absurd and impractical to confine to ‘the matters to which the notice relates’ the scope of investigations undertaken for the first of these purposes – that is, determination by the Commissioner whether or not a Notice should be served. At this initial stage it must obviously be open to the Commissioner to investigate matters that might potentially be included in a Notice to Show Cause but are eventually put to one side when the terms of the Notice are drafted.

46 On this reasoning, it is open to the Commissioner to rely on matters not specified in the Notice to Show Cause when deciding to take action under s 21(1). The proviso, as Mr Elliott submitted, must be that the person against whom action is taken is afforded procedural fairness – that is, he or she must receive due notice of the additional matters relied on and be given an opportunity to respond to them.

47 We turn now to Mr Elliott’s argument based on the fact that the TA Act, in s 22, establishes a procedure for review by the Tribunal and s 63 of the ADT Act requires the Tribunal to make the correct and preferable decision having regard to the material before it. In his submission, the consequence was that the Tribunal could reach a decision in reliance on matters that, due to an express or implicit limitation contained in the TA Act, could not be relied on by the Commissioner in taking action under s 21.

48 We are not persuaded by this. If, contrary to what we have just held, the basis of the Commissioner’s decision was subject to a positive limitation to the matters set out in the Notice to Show Cause because this was the proper interpretation of the TA Act, we are inclined to the opinion that the basis of the Tribunal’s decision would be similarly limited. Section 63 of the ADT Act would still apply to the extent that additional evidence, not available to the Commissioner, could be brought before the Tribunal to establish these matters. But that would be the limit of operation of the principle set out in s 63.

49 We do not have to resolve this issue, by virtue of the conclusion that we have reached in relation to the scope of the Commissioner’s powers under s 21 of the TA Act.

50 In order to determine whether procedural fairness in relation to this particular issue was accorded to Suzanne Frugtniet, we have made our own examination of the transcript of the Tribunal hearing and the written submissions put to it on behalf of both the Commissioner and Suzanne Frugtniet. We are satisfied that, within the meaning of the Court of Appeal’s judgments in Sabag v Health Care Complaints Commission, the question whether Suzanne Frugtniet’s response to the Notice to Show Cause was misleading for the reasons set out by the Tribunal was genuinely ‘litigated’ at the hearing.

51 In reaching this conclusion, we take particular account of the nature of this question. Its resolution did not depend on the provision of new evidence at the hearing by the Commissioner, in reply to which Suzanne Frugtniet, in order to present her case fully, may have needed or at least preferred to obtain and lead her own evidence. Instead, the question was only whether certain inferences did or did not arise from passages in her response to the Notice to Show Cause, these being inferences that were contradicted by the existence of her Victorian convictions. She was familiar, of course, with the contents of her response and the details of her convictions and she knew before the hearing that evidence of these would be tendered at the hearing. During her cross-examination, it was put to her that the relevant inferences arose and were misleading on account of the convictions. She had an opportunity to dispute these assertions. In the closing submissions, this question was directly addressed, first by Mr Elliott on the Commissioner’s behalf, then by Mr Frugtniet on her behalf.

52 Having regard to these matters, we consider that the question was genuinely ‘litigated’ in a manner that gave Suzanne Frugtniet an entirely adequate opportunity to respond to what was alleged against her. The Tribunal did not err in law in ruling that she was afforded procedural fairness.

53 The second proposition put by Mr Frugtniet was that there is an inherent contradiction in the Act’s regulation of persons involved in the ‘conduct’, though not the ‘direction’ or ‘control’, of a licensed business. Section 21(1)(f) empowers the Commissioner to disqualify a person so involved on the ground that he or she is not ‘fit and proper’ to be so involved. On the other hand, s 8 authorises the Commissioner to grant a licence without any consideration of whether the persons who will be involved in the conduct of the business are ‘fit and proper’. By contrast, where a person who is to be employed as a supervisor of the conduct of the business, pursuant to s 36, is not fit and proper to do so, this constitutes both a ground on which the Commissioner must refuse a licence (s 10(2)(d)) and a ground for disqualification under s 21(1)(f).

54 This inconsistency, in Mr Frugtniet’s submission, compelled the conclusion that s 21(1)(f) was in conflict with the overall regulatory structure and aims of the Act and should be deemed not to apply to persons involved only in the ‘conduct’, as distinct from the ‘direction’ or ‘control’, of a licensed business.

55 At an early stage of the hearing before us, he made an application for a decision under s 118(1) of the ADT Act that this question of law be referred to the Supreme Court for the opinion of the Court. He requested that we determine this issue of referral at the end of the hearing. When however this stage had been reached, he withdrew this application, while still maintaining his argument as a ground of appeal before us.

56 Mr Elliott’s submission on the merits of this argument was that there was no necessary contradiction as alleged between s 8 and s 21(1)(f). It was quite open to the legislature to specify that employees and others involved only in the conduct of a travel agency might be liable to disqualification if found not to be fit and proper, while not insisting that this matter be investigated at the time when a licence for the agency is granted.

57 We accept Mr Elliott’s submission. We would add that a reason for the apparent inconsistency may simply be as follows. At the time when a licence is applied for, the identity of the licensee and of the persons who will initially manage the business must be known. In consequence, the issue of whether they are fit and proper can readily be investigated. This will usually not be the case with some, if not all, of the other persons involved in the conduct of the business. But if subsequently it appears that any such person is not fit and proper to be so involved, the aims of the legislation are well served by provisions specifying this as a ground of disqualification.

58 Thirdly, Mr Frugtniet argued that, having regard to the fact that Suzanne Frugtniet was not required to disclose the Victorian convictions in her response to the Notice to Show Cause, the Tribunal’s ruling that her statement was misleading was not open to it. The important sentences on which the Tribunal based its ruling were these: ‘The circumstances occurred in January 1995, some 7 years ago and the matter is stale. I have since been gainfully employed in the most reputable law firm in this country’.

59 Mr Frugtniet contested the proposition that she thereby implied untruthfully that this employment was continuous. In this connection, he relied also on the alternative version contained in her response but not mentioned by the Tribunal (see [29] above). The significant sentence in this version was: ‘I have been gainfully employed for several years now in very reputable law firms in the city.’

60 In response, Mr Elliott stressed that Suzanne Frugtniet made affirmative choices (a) to respond at all to the Notice to Show Cause and (b) in so doing, to refer to her ‘gainful employment’ during the period since her two convictions in 1995. The wording that she adopted conveyed the impression that during this period she had not (to quote his written words) ‘come to the attention of the law’. This was false, as she had in fact been convicted in Victoria in June 1998 and had spent the succeeding 12 months in gaol.

61 In our opinion, the interpretation given by the Tribunal to Suzanne Frugtniet’s statements on this matter in her response to the Notice to Show Cause was clearly open to it. A reasonable person reading her response might well understand her to be saying that her gainful employment with a law firm since 1995 had been wholly or substantially continuous. If subsequently informed that she had in fact spent about a year of that period in gaol, such a person might therefore consider that the statements in the response had been shown to be substantially untrue. We hold this view even after taking into consideration the passage in the response, quoted above at [29], to which the Tribunal did not refer.

62 In arriving at its interpretation, therefore, the Tribunal did not err in law.

Pretending to be Renuka Ranasinghe

63 In the Tribunal’s judgment, the relevant factual matters and the findings that have been challenged in this appeal were set out as follows, at [54 – 58]:-

Represented that she was Renuka Ranasinghe.

55 Renuka Ranasinghe gave evidence that at one stage she rang Travel Action Pty Ltd and Susan Javor answered. Ms Ranasinghe asked to speak to Suzanne. Ms Ranasinghe said that Ms Javor seemed puzzled and asked who was calling. Ms Ranasinghe said “Renuka”. Ms Javor said “Renuka is here.” Suzanne Frugtniet then spoke to Renuka Ranasinghe and told her that Susan knows her as “Renuka”.

56 Suzanne Frugtniet denied that she had ever represented herself as being Renuka Ranasinghe. In her view Susan Javor merely assumed that she was Renuka Ranasinghe.

57 Findings in relation to representation. Susan Javor gave credible evidence about Suzanne Frugtniet representing that she was Renuka Ranasinghe. Renuka Ranasinghe corroborated that evidence. Suzanne Frugtniet’s denial was unconvincing. I find that she told Susan Javor on the phone that she was Renuka Ranasinghe. Subsequently, although she knew that Susan Javor thought she was Renuka Ranasinghe she did nothing to disabuse her of that assumption.

58 The inference suggested by the Commissioner can readily be drawn that her motive for seeking to pass herself off as Ms Ranasinghe was to distance herself from Travel Action Pty Ltd. Given her previous history with travel agencies, any involvement was likely to attract the interest of the authorities.

64 The first ground of appeal against these findings was that there was no evidence capable of supporting the Tribunal’s finding that such steps as Suzanne Frugtniet took to give the impression that she was Ms Ranasinghe were motivated by a wish to deceive Ms Javor and thereby distance herself from Travel Action.

65 Mr Frugtniet submitted that because such a serious allegation was being made against Suzanne Frugtniet and because these were in substance disciplinary proceedings, there was a need for cogent evidence enabling the Tribunal to be ‘comfortably satisfied’, by virtue of the principles laid down by the High Court in Briginshaw v Briginshaw (1938) 60 CLR 336. He argued that evidence of this nature had not been adduced.

66 As part of this argument, he raised the contention that the Commissioner had failed to call Mr Joseph Stanislav, a former director of Travel Action, who would have been able to provide relevant testimony. He claimed that the Tribunal should therefore have assumed that Mr Stanislav’s evidence would not have supported the Commissioner’s allegations. He invoked here the rule in Jones v Dunkel (1959) 101 CLR 298.

67 The second ground of appeal was that there was a denial of natural justice to Suzanne Frugtniet, by virtue of an alleged failure by the Commissioner to put all relevant matters to her in cross-examination. Mr Frugtniet invoked here the rule in Browne v Dunn (1893) 6 R 67. The particular issue, he said, which the Commissioner failed to put to her was that of her motive in passing herself off as Ms Ranasinghe.

68 In reply, Mr Elliott first pointed out that the Tribunal, in its judgment at [8], had held itself to be bound by the principles in Briginshaw v Briginshaw. He submitted, however, that because this was not genuinely a disciplinary proceeding, these principles were not applicable. He reserved the right to argue these matters on appeal, if necessary.

69 He argued next that the evidence before the Tribunal clearly provided a sufficient basis for its finding that Suzanne Frugtniet had represented herself to Ms Javor to be Ms Ranasinghe. It had heard the evidence of the three people primarily involved: Ms Javor, Ms Ranasinghe and Suzanne Frugtniet. It had found the evidence of the first of these to be credible and that of Suzanne Frugtniet to be unpersuasive. The challenge made to its finding fell well short of the test to be applied by an appellate body reviewing the evidentiary foundation for a finding by a court or tribunal at first instance, when the court or tribunal has seen and heard the witnesses and assessed their credibility. This, as laid down in Galea v Galea (1990) 19 NSWLR 263 at 266-267, was that the finding should not be overturned unless it is ‘glaringly improbable’.

70 Mr Elliott advanced a similar contention in relation to the Tribunal’s finding that Suzanne Frugtniet’s motive in passing herself off as Ms Ranasinghe was to distance herself from Travel Action. On account of her previous engagement with the activities of travel agencies, any involvement on her part with Travel Action was, as she well knew, likely to attract the interest of the authorities. The inference by the Tribunal that she would wish to avoid this was therefore fully open on the evidence and was certainly not ‘glaringly improbable’.

71 As to the submission based on Jones v Dunkel, Mr Elliott argued that (a) there was no reason to assume that Mr Stanislav’s evidence would have substantiated Suzanne Frugtniet’s version of events and (b) it would have been entirely feasible for Suzanne Frugtniet herself to call Mr Stanislav.

72 In relation to the alleged denial of natural justice to Suzanne Frugtniet, Mr Elliott, as we understood him, argued first that the Commissioner could not have significantly questioned her in cross-examination regarding her motive in pretending to be Ms Ranasinghe because in her evidence she had denied engaging in any such pretence.

73 He also submitted that the rule in Browne v Dunn did not apply to proceedings in this Tribunal. He relied on recent decision of the High Court in Re Minister for Immigration and Multicultural Affairs Ex Parte Applicant S154/2002 [2003] HCA 60 that the rule did not apply to proceedings in the Refugee Review Tribunal.

74 We have conducted our own review of the relevant evidence before the Tribunal. We are satisfied that the written and oral evidence of Ms Javor (who was cross-examined at some length about these matters) and of Ms Ranasinghe (whose cross-examination did not extend to these matters) provided a sufficient basis for the Tribunal’s findings. We consider that these findings are not ‘glaringly improbable’. We see no reason to doubt the Tribunal’s assessment of the credibility of these two witnesses and of Suzanne Frugtniet, having regard to the fact that, unlike the Tribunal, we have not had the advantage of seeing and hearing them in the witness box.

75 In reaching this conclusion, we apply not only the principles derived by Mr Elliott from Galea v Galea (1990) 19 NSWLR 263 at 266-267, but also a later, more authoritative statement of the relevant law. In Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479, the judgment of Brennan, Gaudron and McHugh JJ contains the following passage (footnotes omitted):-

More than once in recent years, this Court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against – even strongly against – that finding of fact. If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge has “failed to use or has palpably misused his advantage” or has acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”.

76 We have accepted, as did the Tribunal, Mr Frugtniet’s submission that clear and cogent evidence was required, by virtue of the principles laid down by the High Court in Briginshaw v Briginshaw. Whether or not this is the case because these proceedings must be characterised as disciplinary, this requirement applies for the separate reason that the allegation sought to be proved against Suzanne Frugtniet was a serious one, namely, that she engaged knowingly in deceptive conduct. This is indeed the basic proposition underlying the High Court’s judgments in that case: see eg Rich J at 350, Dixon J at 361-363, McTiernan J at 372. It was reaffirmed by the Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1993) 67 ALJR 170 at 170-171.

77 As to whether a presumption arises from Jones v Dunkel on account of Mr Stanislav not being called, we accept the submissions of Mr Elliott. It could not be assumed that his evidence would have supported that of Suzanne Frugtniet, and no reason was advanced why she could not have called him as a witness.

78 We have concluded also that there was no denial of natural justice to Suzanne Frugtniet, because there was in fact no failure by the Commissioner to put all relevant matters to her in cross-examination. We understood Mr Elliott to say that the Commissioner could not have significantly questioned her in cross-examination regarding her motive in pretending to be Ms Ranasinghe because in her evidence she had denied engaging in any such pretence. The transcript shows, however, that both her conduct in pretending to be Ms Ranasinghe and her motive for such conduct were put to her. She denied portraying herself as Ms Ranasinghe, claiming that Ms Javor simply made this assumption. The issue of motive was put to her in the following way (Transcript, 8.5.03, p 99):-

You were portraying yourself as Renuka Ranasinghe at that time because you wanted to distance yourself from – from your name being involved in that business, didn’t you?

79 Her reply was:-

I wasn’t involved in the business to the extent of being an owner of it or a director of it. I was a consultant.

80 In our view, the rule in Browne v Dunn, if applicable, was not infringed. We will add, though we do not need to determine this issue, that in our opinion the question of its applicability was not necessarily put beyond doubt by the High Court’s decision in Re Minister for Immigration and Multicultural Affairs.

81 The issue in that case, put shortly, was whether a factual finding adverse to a prosecutrix could properly be made when a member of the Refugee Review Tribunal, having asked some questions about a specific aspect of her claim, stated that he did not need to ask her any further questions about it. As stated by Gummow and Heydon JJ at [57], the principal ground put forward for the High Court’s ruling was that proceedings in that Tribunal were ‘not adversarial, but inquisitorial’. Accordingly, they said, ‘the Tribunal Member conducting the inquiry is not an adversarial cross-examiner, but an inquisitor obliged to be fair’ and ‘it was not part of the function of the Tribunal to seek to damage the credibility of the prosecutrix’s story in the manner a cross-examiner might seek to damage the credibility of a witness being cross-examined in adversarial proceedings’.

82 Their Honours indicated, however, that rules of procedural fairness might still be breached if the Refugee Review Tribunal misled a party into believing that, on a particular issue, he or she had succeeded. They stated, for instance, at [58]:-

It would have been erroneous for the Tribunal to have represented at the hearing that a particular piece of evidence or argument had been accepted and then to have rejected it in the decision in circumstances where, but for the representation, the prosecutrix could have mended her hand.

83 In the present case, the questions were put by counsel in a cross-examination conducted with the purpose, amongst other things, of inflicting damage on Suzanne Frugtniet’s credibility. The proceedings, at this stage at least, were adversarial. In our opinion, therefore, the circumstances before us do not necessarily fall within the scope of the High Court’s decision.

84 For the foregoing reasons, Suzanne Frugtniet’s appeal against the Tribunal’s findings regarding her impersonation of Ms Ranasinghe is rejected. No error of law has been shown.

Suzanne Frugtniet’s previous involvement with failed travel agencies

85 This aspect of Suzanne Frugtniet’s appeal was directed at the following sentence in the Tribunal’s judgment at [77]: ‘She has been involved, either directly or indirectly, with several failed travel agencies’. This sentence formed part of a summary of reasons given by the Tribunal for determining that Suzanne Frugtniet was not a fit and proper person to be involved in the direction, management or conduct of a travel agency.

86 The circumstances of Suzanne Frugtniet’s prior involvement with travel agencies other than Travel Action were outlined by the Tribunal at [31 – 33], [59] and [64], along with other matters. Three such agencies were identified as having failed: Travel Trend International Pty Ltd (‘Travel Trend’), Denhall Pty Ltd (‘Denhall’) and Tarson Pty Ltd (‘Tarson’). The second and third of these were described as having taken over the business of the first.

87 Mr Frugtniet put forward five grounds of appeal in relation to the finding in [77]. We will deal with them one by one.

88 First, Mr Frugtniet raised in this context the ground of appeal, already discussed in another context, that the Notice to Show Cause sent to Suzanne Frugtniet under s 20(1) of the TA Act did not include this allegation. Mr Elliott’s response once more was that this did not matter because the issue had been ‘genuinely litigated’ in the Tribunal. Having assessed for ourselves that this was indeed the case, we dismiss this ground of appeal, for the reasons set out above at [35 – 52].

89 Secondly, Mr Frugtniet contended that the finding could not stand by virtue of a factual error by the Tribunal, occurring in the course of its outline of Suzanne Frugtniet’s prior involvement. At the commencement of [59], the Tribunal stated: ‘One of the reasons for the decision to disqualify Suzanne Frugtniet was her previous association with other travel agencies.’ The decision referred to here was that of the Commissioner. In fact, the Commissioner did not put forward this matter as one of the reasons for its decision to disqualify Suzanne Frugtniet.

90 Relevantly, Mr Frugtniet cited in support of this submission the High Court’s judgments in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24. Here the Court held that it was appropriate for the Federal Court to overrule a discretionary decision by the appellant Minister to grant Crown land to Aboriginals claiming traditional rights, on the ground that this decision was based on an erroneous understanding of factual matters which he was required to take into account.

91 In response, Mr Elliott maintained that the specific findings on which the Tribunal relied in stating its conclusion at [77] were those set out in later in [59] and also at [60 – 66]. There was no ground for inferring, he said, that the Tribunal relied solely or indeed substantially on what it put forward as the grounds of the Commissioner’s decision to disqualify Suzanne Frugtniet. It made its own independent determination that Suzanne Frugtniet was not a fit and proper person to be involved in the direction, management or conduct of a travel agency. Amongst the grounds for that decision, it included its own specific finding, which was entirely open to it on the evidence, that, as stated in [77], Suzanne Frugtniet had been ‘involved, either directly or indirectly, with several failed travel agencies’.

92 Mr Elliott relied also on the proposition, stated by Brennan J in Waterford v Commonwealth (1987) 163 CLR 54 at 77, that ‘there is no error of law simply in making a wrong finding of fact’.

93 Having considered carefully the relevant parts of the Tribunal’s judgment, we agree with these submissions of Mr Elliott. The erroneous assumption by the Tribunal regarding the Commissioner’s grounds for disqualifying Suzanne Frugtniet did not play a role in the Tribunal’s own independent conclusion regarding her involvement in failed travel agencies. A direct link between its factual error and the decision being challenged, such as underpinned the High Court’s holding in Peko-Wallsend, was not present here.

94 The third ground of appeal in relation to the finding of Suzanne Frugtniet’s involvement with failed travel agencies was that it was based on material that should not have been admitted into evidence.

95 This material included a large quantity of documentary material annexed to an affidavit sworn by Mr Antony Whittaker, the manager of special investigations for the Travel Compensation Fund (‘TCF’). As explained in the Tribunal’s judgment at [17], the role of the TCF, a statutory authority, is to regulate the financial obligations of travel agents, compensate consumers who lose money on account of the activities of travel agents and ensure the financial viability of travel agents. It is a separate entity from the Commissioner, but the two authorities sometimes work together.

96 Amongst the annexures to Mr Whittaker’s affidavit was an unreported judgment of the Commercial Tribunal, delivered on 27 March 1995, in Manila Marketing Pty Ltd v Travel Compensation Fund (No. 1116 of 1993). In that judgment, the Tribunal noted that Suzanne Frugtniet had been a director of Travel Trend, which had been found by an accountant, Mr Ross Gatwood, to have had totally insufficient financial resources. It also recorded her saying that, after the business of this company had been sold to Denhall, she worked for the latter company as ‘a travel agent consultant on commission’.

97 Mr Frugtniet’s objections to the admission of this material were the following: (a) that Mr Gatwood had not been cross-examined, so it was an error for the Tribunal to treat Travel Trend as a ‘failed’ travel agency; (b) that Suzanne Frugtniet had not been a party to the proceedings in the Commercial Tribunal; and (c) that the annexures to Mr Whittaker’s affidavit included other clearly irrelevant and prejudicial material, such as copies of newspaper articles.

98 The main points in Mr Elliott’s argument in response were as follows. The fact that no party to the Commercial Tribunal proceedings sought to cross-examine Mr Gatwood did not mean that his findings were to be ignored. It was open to this Tribunal to take account of the findings of the Commercial Tribunal, whose jurisdiction in these matters it had ‘inherited’, since reliance by a tribunal on its earlier findings of fact had been endorsed by the Federal Court in Secretary of the Department of Veterans’ Affairs v Studdert [2001] FCA 1642, at [26]. In any event, the Commercial Tribunal’s observations regarding Suzanne Frugtniet’s involvement in Denhall were based on admissions that she herself had made in the proceedings. There was nothing to indicate that the Tribunal had taken any account at all of the newspaper articles, or any other similarly prejudicial material annexed to Mr Whittaker’s affidavit.

99 Mr Elliott relied also on admissions of involvement in Denhall and Tarson that Suzanne Frugtniet had made during cross-examination in the present proceedings. These are summarised as follows in the Tribunal’s judgment, at [60]:-

The Sydney business of Travel Trend was sold to Denhall at the end of 1990. The Melbourne business was sold to Tarson. Suzanne Frugtniet gave evidence that she continued on as a consultant to Denhall and Tarson after the sale because the good will of the Travel Trend business depended on continuity of service being maintained. She was paid commission for the bookings she brought in.

100 Ultimately, Mr Frugtniet appeared to concede on Suzanne Frugtniet’s behalf that in her evidence in the Commercial Tribunal proceedings she had admitted to involvement with the business of Denhall. But he denied the truth of any allegation, such as Mr Whittaker had made, that she controlled, or participated in the control of, this company or any other of the companies mentioned.

101 This concession goes a long way towards resolving in the Commissioner’s favour this particular ground of appeal. The challenged finding of the Tribunal was only that Suzanne Frugtniet was ‘involved, directly or indirectly’ with the relevant businesses. As we have just indicated, she admitted also in her evidence to this Tribunal that she had been involved, as a consultant, in the operations of Tarson as well as Denhall. Nothing put to us by Mr Frugtniet provided any reason for discounting these admissions.

102 Independently of these considerations, we would in any event endorse generally the arguments put by Mr Elliott. The grounds on which Mr Frugtniet’s challenged the Tribunal’s reliance on the material annexed to Mr Whittaker’s affidavit are not in our view convincing.

103 We do not, however, consider that the proposition that Mr Elliott sought to derive from Secretary of the Department of Veterans’ Affairs v Studdert is to be found in the passage on which he relied. That passage, as we read it, authorised reliance by the tribunal in question on its earlier findings only in relation to ‘common issues of fact of general application’. This is not the type of factual issue involved here. If this Tribunal were to apply here the normal rule governing proceedings in which the laws of evidence were operative, it would be bound under s 91 of the Evidence Act 1995 to declare that evidence of the Commercial Tribunal’s findings was inadmissible.

104 Our rejection of this part of Mr Elliott’s argument does not detract from the most significant point in the Commissioner’s favour. This is that the challenged finding of the Tribunal was principally based on admissions made by Suzanne Frugtniet during proceedings in both the Commercial Tribunal and this Tribunal, not on any findings of the Commercial Tribunal.

105 The outcome is that we reject the third ground of appeal in relation to the Tribunal’s finding of involvement by Suzanne Frugtniet with failed travel agencies.

106 Mr Frugtniet’s fourth ground of appeal was that if this finding was indeed only of involvement – for example, as an employee or consultant – with the conduct of one or more failed travel agencies, as opposed to participation in management or control, we should hold it to be irrelevant to the broader issue that the Tribunal had to determine, namely, whether Suzanne Frugtniet was a fit and proper person to be involved in the direction, management or conduct of a travel agency. He asked why the Commissioner should have treated this involvement as a matter to be held against her, but had not taken proceedings against those who did control the failed agencies.

107 Mr Elliott’s response was that we should bear in mind that these were small private companies, in which the behaviour of anyone involved – not just the directors and managers – might well be significant. He argued also that, while the Tribunal expressly took into account its finding of Suzanne Frugtniet’s involvement with the failed agencies in reaching its conclusion on the issue of fitness and propriety, it did not treat this finding as having great significance.

108 Again, we agree with Mr Elliott. There is nothing in the Tribunal’s judgment to suggest that it regarded Suzanne Frugtniet’s involvement with failed travel agencies as a consideration of special significance in determining the issue of fitness and propriety. It was merely a matter to be taken into account. We see no error of law in its approach to the question.

109 Fifth and finally, Mr Frugtniet argued that these matters could not have been raised against Suzanne Frugtniet by the Tribunal, since they occurred more than five years earlier and s 47 of the TA Act laid down a limitation period of five years for the prosecution of any offence under the Act. He did not develop this argument at any length. We do not believe that this limitation period applies in quite distinct contexts such as the present.

110 For the foregoing reasons, we dismiss all five grounds of appeal relating to this aspect of the Tribunal’s judgment regarding Suzanne Frugtniet.

The nature of the offences of which Suzanne Frugtniet was convicted

111 A final contention of Mr Frugtniet, put in writing but not orally, was that Suzanne Frugtniet’s convictions in New South Wales and Victoria should not have been taken into account by the Tribunal in deciding under s 21(1) of the TA Act that she should be disqualified, because the offences to which they related were not committed in the course of conducting business as a travel agent.

112 This argument is without merit. The offences in question involved dishonesty. Irrespective of whether they were committed by Suzanne Frugtniet in the course of conducting business as a travel agent, they were a matter of concern for anyone determining whether she was a fit and proper person to be involved in such a business. In addition, there was, as indicated in the Tribunal’s judgment at [44], sufficient evidence before the Tribunal to support its finding, at [70], that her New South Wales convictions were in fact for offences committed in the course of conducting business as a travel agent.

Conclusions regarding Suzanne Frugtniet

113 We have examined all the grounds of appeal put forward by Suzanne Frugtniet and found that none of them discloses an error of law by the Tribunal. There is accordingly no basis on which we should disturb its conclusion, at [77], that Suzanne Frugtniet is not a fit and proper person to be involved in the direction, management or conduct of a travel agency.

114 We note, but do not need to rule on, Mr Elliott’s submission that the Tribunal, in reaching this conclusion, treated some of the challenged findings – for example, that she engaged in misleading conduct in not disclosing her Victorian convictions in her response to the Notice to Show Cause – as only of limited significance. Mr Elliott pointed out that the most important factual considerations supporting this conclusion – namely, to quote the Tribunal at [77], that Suzanne Frugtniet had been ‘involved in high level criminal activity in the early 1990s’ and ‘behaved dishonestly again in 1995’ – had not been, and indeed could not have been, challenged in her appeal. Against this line of argument, it must however be noted that the Tribunal, in the same paragraph, stated that its general conclusion was the outcome of all of its adverse findings and that ‘any one of the matters summarised above’ might not justify this conclusion.

115 The submissions in support of the appeal did not challenge specifically the Tribunal’s further conclusion that, having found Suzanne Frugtniet not to be fit and proper to be involved in the direction, management or conduct of a travel agency, it should affirm the Commissioner’s decision to disqualify her permanently. The Tribunal set out its reasons for taking this further step at [78 – 81]. We see no flaw in these reasons. There being no grounds requiring us to set aside the finding as to fitness and propriety, it follows that the Tribunal’s order affirming the Commissioner’s decision to disqualify Suzanne Frugtniet must also stand.

DECISION 2: BRIAN FRUGTNIET

Failure to disclose convictions in Victoria

116 As in the case of Suzanne Frugtniet, the decision of the Commissioner regarding Brian Frugtniet that was challenged before the Tribunal was made in exercise of the powers conferred under s 21(1)(e) and (f) of the TA Act. The gist of the Tribunal’s finding under this heading (at [91]) was that, in an answer said to have been given on 24 June 2002 by Brian Frugtniet to a Notice to Show Cause served on him on 10 June 2002 by the Director-General, he displayed a ‘lack of candour’.

117 As with Suzanne Frugtniet, the Commissioner in fact served an earlier Notice on Brian Frugtniet. This occurred on 13 May 2002, but this earlier Notice was withdrawn by a letter dated 7 June 2002.

118 Both Notices to Show Cause alleged that the Commissioner had reasonable grounds to believe that Brian Frugtniet, being a person involved in the direction, management or conduct of Travel Action, was not a fit and proper person to be so involved. In both Notices, the particulars in support of this allegation included the following passage:-

A criminal record search shows that on 27 January 1995, Brian Frugtniet was convicted on 5 counts of make false instrument and 5 counts of use false instrument and given a custodial sentence of 12 months.

119 According to the Tribunal’s judgment at [90], the response of Brian Frugtniet to this passage in the Notice of 10 June 2002 was as follows:-

In any event, the matters I was convicted for relate to a period of time from 1 October 1991 to 5 December 1991, some 11 years ago. I was of prior good character and since that matter I have never ever been involved in any other issues of any kind anywhere.

120 In fact, this statement by Brian Frugtniet is paragraph 8(b) of an affidavit sworn by him on 3 June 2002, for the purposes of earlier proceedings in the Tribunal relating to the suspension of Travel Action’s licence. The paragraph is expressed to form part of his answer to the passage referring to his criminal convictions in the earlier of the two Notices to Show Cause.

121 In his formal response under s 20(5) of the TA Act to the same passage in the later of the two Notices, Brian Frugtniet made two statements, appearing close to each other. They were as follows:-

I have not been involved in anything untoward and I have never been involved in anything prior to the matter in 1991 nor any matter since 05 December 1991.

122 In the intervening passage, Brian Frugtniet stated that he had ‘rehabilitated’ and had undertaken charitable fundraising activities for which he had been awarded a certificate of merit. He also said that he was medically unfit.

123 The grounds on which the Tribunal found the statement set out above at [119] to demonstrate a lack of candour derived from its failure to mention two convictions and a resulting prison sentence in Victoria. On 28 June 1998, Brian Frugtniet was convicted in the Victorian County Court of one count of conspiring to make false documents and one count of conspiring to use false documents. The NSW and Victorian convictions apparently arose from the same series of events in 1991. He was sentenced to a minimum period of imprisonment of 3 years and 6 months. He served this period and was released from gaol on 5 October 2001. His appeals to the Supreme Court of Victoria, the Court of Criminal Appeal of Victoria and the High Court were unsuccessful. He maintained his innocence in relation to the matters for which he was convicted.

124 Before the Tribunal, it was put to Brian Frugtniet that the statement in his affidavit – which was mistakenly said to have formed part of his formal response under s 20(5) of the TA Act to the later Notice to Show Cause – failed to reveal the fact that he had been convicted of offences in Victoria since 1991. His reply was that it was in the period of time specified in his response – October to December 1991 – that he engaged in the conduct leading to both sets of convictions (the validity of which he denied). He alleged also that on grounds of privacy he was not bound to disclose the Victorian convictions.

125 The Tribunal’s finding was in the following terms:-

I find that although his response is technically correct, Brian Frugtniet failed to fully disclose the extent of his criminal convictions to the Commissioner. While not obliged to do so, that failure demonstrates a lack of candour on his part.

126 It should be noted that, in contrast to the Tribunal, the Commissioner, in determining under s 21(1)(f) that Brian Frugtniet should be disqualified, did not refer to his failure to disclose the Victorian convictions or suggest that on account of such failure or for any other reason this part of his response to the Notice to Show Cause showed a lack of candour.

127 Mr Frugtniet put forward three grounds of appeal in relation to this finding of the Tribunal. The first two were the same as he argued in relation to the equivalent ground in Suzanne Frugtniet’s appeal. In our opinion, they should both be rejected for the same reasons as applied in her appeal. These are set out above, at [35-57].

128 One of the matters that we considered in Suzanne Frugtniet’s appeal in the course of rejecting the first ground was whether the question at issue (this being whether passages in her response to the Notice to Show Cause were misleading in the light of her having been convicted of criminal offences in Victoria) had been genuinely ‘litigated’ in the Tribunal. Our positive answer to this question was based on our own examination of the transcript of the Tribunal hearing and the written submissions put to it on behalf of both the Commissioner and Suzanne Frugtniet.

129 We have performed the equivalent exercise in relation to Brian Frugtniet’s appeal. The same pattern is discernible. The question was whether certain inferences did or did not arise from passages in his response under s 20(5) of the TA Act to the later Notice to Show Cause, these being inferences that were contradicted by the existence of his Victorian convictions. He was familiar, of course, with the contents of both his response and his earlier affidavit and with the details of his convictions. He knew before the hearing that evidence of these would be tendered at the hearing. During his cross-examination, it was put to him that the relevant inferences arose and demonstrated a lack of candour on his part on account of the Victorian convictions. He had an opportunity to respond. In the closing submissions, this question was directly addressed, both by Mr Elliott and by Mr Frugtniet. We consider therefore that the matter was genuinely ‘litigated’ in the Tribunal.

130 The third ground of appeal was that, having regard to the fact that Brian Frugtniet was not required to disclose the Victorian convictions in his response to the Notice to Show Cause, the Tribunal’s ruling that his statement showed a lack of candour was not open to it.

131 The passage which the Tribunal set out as the basis of its ruling is quoted above at [119]. In fact, as is indicated at [120], this passage did not appear in Brian Frugtniet’s response under s 20(5) of the TA Act to the later Notice to Show Cause, but in an earlier affidavit. In the response, there were instead two statements, which are quoted at [121]. We do not believe this error of the Tribunal to be material because the passage upon which it based its ruling conveys the same meaning, so far as is relevant here, as the two statements that he included in his response.

132 In the passage on which the Tribunal replied, we consider that the words ‘I have never ever been involved in any other issues of any kind anywhere’ can legitimately be interpreted as including a denial by Brian Frugtniet of involvement in any ‘other issues’ of a similar kind to his prosecution, trial and convictions in the NSW criminal proceedings. In the statements that Brian Frugtniet in fact included in his response under s 20(5) to the second Notice to Show Cause, the words ‘I… have not had anything adverse against me since’ are open to a similar interpretation as regards the period between December 1991 and the date of the response. Both of these implied denials are untrue, because in 1998 he was tried and convicted in Victoria. The interpretation which in the Tribunal he sought to put on the former passage – that it went no further than to deny criminal conduct on his part on either side of the period between October and December 1991 – does not take proper account of the words that we have just quoted and is in any event artificial and unconvincing.

133 It was therefore, in our opinion, open to the Tribunal to conclude that he exhibited a lack of candour in his response to the Commissioner, even though the passage that cited it in support of this finding only resembled, and was not the same as, the statements that he actually made in his formal response to the relevant Notice to Show Cause.

Brian Frugtniet’s previous involvement with failed travel agencies

134 In similar fashion to its determination on equivalent issues in relation to Suzanne Frugtniet, this aspect of Brian Frugtniet’s appeal was directed at a finding by the Tribunal (at [105], [110] and [113]) that he had been involved, either directly or indirectly, with various failed travel agencies. At [113], this finding formed part of a summary of reasons given by the Tribunal for determining that Brian Frugtniet was not a fit and proper person to be involved in the direction, management or conduct of a travel agency.

135 The circumstances of Brian Frugtniet’s involvement with travel agencies other than Travel Action were outlined by the Tribunal at [31 – 33], [59] and [64], along with other matters. Again, three such agencies were identified as having failed: Travel Trend, Denhall and Tarson. The second and third of these were described as having taken over the business of the first.

136 Mr Frugtniet argued six grounds of appeal in relation to the finding in [113].

137 First, he raised in this context the ground of appeal, already discussed in relation to the corresponding part of Suzanne Frugtniet’s appeal, that the Notice to Show Cause sent to Brian Frugtniet under s 20(1) of the TA Act did not include this allegation. Mr Elliott’s response once more was that this did not matter because the issue had been ‘genuinely litigated’ in the Tribunal. Having assessed for ourselves that this was indeed the case, we dismiss this ground of appeal, for the reasons set out above at [35 – 52].

138 Secondly, Mr Frugtniet contended that the finding could not stand by virtue of a factual error by the Tribunal, equivalent to an error committed in its treatment of Suzanne Frugtniet. At the commencement of [105], the Tribunal stated: ‘One of the reasons for the disqualification of Brian Frugtniet was his previous association with other travel agencies.’ The decision referred to here was that of the Commissioner. In fact, the Commissioner did not put forward this matter as one of the reasons for its decision to disqualify Suzanne Frugtniet.

139 For the reasons that we have outlined above at [89 – 93] in connection with Suzanne Frugtniet’s appeal, we dismiss this ground of appeal by Brian Frugtniet. In all relevant respects, the situation here is identical.

140 The third ground of appeal in relation to the finding of Brian Frugtniet’s involvement with failed travel agencies, again corresponding to a line of argument put in Suzanne Frugtniet’s appeal, was that the finding was based on material that should not have been admitted into evidence, notably the documentary material annexed to the affidavit of Mr Whittaker. In the annexed judgment of the Commercial Tribunal in Manila Marketing Pty Ltd v Travel Compensation Fund, the Tribunal noted that Brian Frugtniet had been a director of Travel Trend, which had been found by Mr Gatwood to have had totally insufficient financial resources. It also recorded him saying that, after the business of this company had been sold to Denhall, he had been ‘involved in producing tour brochures’ and in ‘getting clients for’ the latter company.

141 As in Suzanne Frugtniet’s appeal, Mr Frugtniet’s objections to the admission of this material were the following: (a) that Mr Gatwood had not been cross-examined; (b) that Brian Frugtniet had not been a party to the proceedings in the Commercial Tribunal; and (c) that the annexures to Mr Whittaker’s affidavit included other clearly irrelevant and prejudicial material, such as copies of newspaper articles.

142 Once again, however, we agree with Mr Elliott that (a) the fact that no party to the Commercial Tribunal proceedings sought to cross-examine Mr Gatwood did not mean that his findings were to be ignored; (b) the Commercial Tribunal’s observations regarding Brian Frugtniet’s involvement in Denhall were based on admissions that he himself had made in the proceedings; and (c) there was nothing to indicate that the Tribunal had taken any account at all of the newspaper articles, or any other similarly prejudicial material annexed to Mr Whittaker’s affidavit.

143 Ultimately, Mr Frugtniet appeared to concede on Brian Frugtniet’s behalf that in his evidence in the Commercial Tribunal proceedings he had admitted to involvement with the business of Denhall. But he denied the truth of any allegation, such as Mr Whittaker had made, that Brian Frugtniet controlled, or participated in the control of, this company or any other of the companies mentioned.

144 For reasons outlined above at [103], relating to the scope of application of the Federal Court’s observations in Secretary of the Department of Veterans’ Affairs v Studdert [2001] FCA 1642 at [26], we do not think that the findings of the Commercial Tribunal (in contrast to admissions made in the course of its proceedings) can be relied on here.

145 In the light of these considerations, our response to the third ground of appeal is that it succeeds to the extent that involvement by Brian Frugtniet in the conduct of only two failed agencies – Travel Trend (by virtue of his role as a director) and Denhall (to the extent of his admission to the Commercial Tribunal) – should be taken to have been established.

146 Once more as in Suzanne Frugtniet’s appeal, Mr Frugtniet’s fourth ground of appeal was that if this finding was indeed only of involvement with the conduct of one or more failed travel agencies, as opposed to participation in management or control, we should hold it to be irrelevant to the broader issue that the Tribunal had to determine, namely, whether Brian Frugtniet was a fit and proper person to be involved in the direction, management or conduct of a travel agency.

147 We consider, however, that this ground must be rejected, for the same reasons as in Suzanne Frugtniet’s appeal. These are outlined above at [106 – 107].

148 Fifthly, Mr Frugtniet argued that, as with Suzanne Frugtniet, these matters could not have been held against Brian Frugtniet by the Tribunal, since they occurred more than five years earlier and s 47 of the TA Act laid down a limitation period of five years for the prosecution of any offence under the Act. But as we have said at [108], we do not believe that this limitation period applies in quite distinct contexts such as the present.

149 Sixth and finally, Mr Frugtniet argued that the Tribunal had failed to give adequate reasons, pursuant to its obligation under s 86(5) of the ADT Act, for this finding in relation to Brian Frugtniet. We would agree that it did not review at length the evidence bearing upon this finding. Its discussion occupied a relatively small proportion of eight paragraphs ([31 – 33] and 59 – 64]). But having regard to various authorities cited by Mr Elliott (notably Muralidharan v MIEA (1996) 62 FCR 402 at 414), to the limited scope of the finding so far as we have sustained it and to the nature of the supporting evidence that we have held to be appropriate (i.e., the official record of Brian Frugtniet’s directorship of Travel Trend and his admission to involvement in Denhall), we consider that the reasons given were sufficient to comply with s 89(5).

· he misrepresented to Departmental officers that his “manager” was sick when he knew that Ms Collins was no longer working for Travel Action Pty Ltd.

186 At [145], the Tribunal stated:-

These findings indicate that Mr Frugtniet is antagonistic towards investigators and has misled them on occasions. While these matters are of serious concern they do not, by themselves, support a finding that he is not a fit and proper person to be involved in the direction, management or conduct of a travel business.

187 The former of these two findings relates to Sascha Frugtniet’s role in the events, described at [166 – 168] above, occurring at the office of Travel Action on 12 December 2002. Mr Elliott maintained that the conduct of Sascha Frugtniet in detaining and harassing Mr Whittaker and Mr Grahame showed that he was not prepared to co-operate with regulatory authorities to the extent necessary to enable the travel industry to operate with a significant degree of self-regulation.

188 In response, Mr Frugtniet pointed out that, as the Tribunal’s findings made clear, Sascha Frugtniet played a subordinate role to that of Brian Frugtniet on that occasion.

189 The details of the latter finding are set out in the Tribunal’s judgment at [137 – 140]. The essential features are these. On 20 May 2002, Mr Sebastian Mignacca, an officer in the Department of Fair Trading, visited the office of Travel Action together with Mr John Anderson, another officer, and asked Sascha Frugtniet as to the whereabouts of Ms Siobhan Collins. Sascha Frugtniet had previously represented to the Department that Ms Collins was the manager of Travel Action, and she had in fact been approved in that role by the Department on 20 April 2002. According to Mr Mignacca and Mr Anderson, Sascha Frugtniet told him that Ms Collins was sick. Sascha Frugtniet’s version was that he made a general comment about staff being away sick. Later that day, when Mr Mignacca telephoned Ms Collins on a mobile phone number that Sascha Frugtniet had given him, she told him that she had stopped working at Travel Action more than a month earlier. When Mr Mignacca put this to Sascha Frugtniet, he said he did not know that Ms Collins had left. He thought that since she had her own keys she was not coming in very often.

190 The Tribunal summed up its conclusions in relation to these events as follows:-

I find that Sascha Frugtniet is not being fully frank about his understanding of Ms Collins whereabouts. While Ms Collins did not tell him that she was leaving, he must have know that she had left given that it was at least seven weeks since he had seen her. Despite the fact that all staff worked on a commission only basis and that he sent a memorandum on 18 February 2002 stating that staff should only be in the office when clients had appointments, I find that Sascha did know, long before 20 May 2002, that Ms Collins was no longer working for Travel Action Pty Ltd. He told Mr Mignacca and Mr Anderson that Ms Collins was sick in an attempt to hide the fact that she had not been in attendance.

191 Mr Elliott submitted that Sascha Frugtniet, in giving false answers to legitimate questions by investigating officers, showed that he lacked the qualities of integrity and trustworthiness required of someone who held funds on behalf of members of the public and had an obligation to deal honestly and candidly with regulatory authorities.

192 In response, Mr Frugtniet referred us to a claim by Sascha Frugtniet, in a letter to Mr Mignacca dated 21 May 2002, that he had told Mr Mignacca that he always had a person qualified to act as manager in the office of Travel Action, so that it was not necessary for Mr Mignacca to try to contact Ms Collins.

193 Mr Elliott argued also that the Tribunal erred by failing to take account of four further matters in reaching its conclusion on fitness and propriety. It had expressly found three of these to have been proved. The fourth was evident from the transcript of the Tribunal proceedings but was not mentioned in the Tribunal’s judgment.

194 First, he referred to findings by the Tribunal that Sascha Frugtniet had made ‘assertions about the mala fides of investigating officers without a plausible basis for doing so’ [120] and had ‘failed to fully co-operate with their requests’ [121]. It held, however, that his behaviour in this regard was ‘not sufficiently egregious to reflect adversely on his fitness to be involved in the management or direction of a travel agency’ [121].

195 Mr Elliott submitted that, when the nature and terms of these assertions were taken into account, along with the consideration that the effectiveness of regulatory action depended on honesty, candour and willingness to co-operate on the part of the operators in the industry, it was evident that the Tribunal erred in putting its findings on this matter to one side when determining the issue of fitness and propriety.

196 Mr Elliott relied particularly on assertions made by Sascha Frugtniet in his letter dated 21 May 2002 to Mr Mignacca. These included the following: that Mr Mignacca had come to the office on 20 May ‘in contempt of’ a stay order made by this Tribunal three days earlier; that he ‘harassed’ Sascha Frugtniet and was ‘abusive and intimidating’; that his actions had appeared to ‘obstruct and interfere with’ a legitimate accounting procedure with which Sascha Frugtniet was involved’; and that he was guilty of ‘bias’ and of ‘discrimination’, defamation and victimisation’. With reference specifically to the issue of co-operation with investigating officers, Mr Elliott pointed to a statement by Sascha Frugtniet that Mr Mignacca should put in writing any requirement that specified records be made available for inspection.

197 In a previous letter, dated 20 May 2002, Sascha Frugtniet had alleged that Mr Mignacca had on that day been guilty of ‘hounding and harassing’ him and his staff, ‘abusing the powers’ vested in him and making ‘unreasonable’ demands. He had made the same request for advance notice in writing of any inspection of records.

198 In reply, Mr Frugtniet pointed out that, as the Tribunal indicated at [18 – 26], Sascha Frugtniet, together with Brian Frugtniet and Suzanne Frugtniet, had consistently maintained that the investigating officers employed or engaged by the Commissioner or TCF had acted in bad faith or for improper purposes. This was, he said, their bona fide belief, in consequence of which Sascha Frugtniet felt aggrieved. The allegation of bad faith in particular was not one that could easily be substantiated, as the Tribunal itself said at [20]. The truth of the claims made by Sascha Frugtniet in his letter could not be ascertained by the Appeal Panel, whereas the Tribunal, having all the facts before it, chose not to treat Sascha Frugtniet’s claims as relevant to the issue of fitness and propriety. It was important also, Mr Frugtniet said, that Mr Mignacca, when replying in writing on 21 May 2002, made no complaint about the terms of either of Sascha FrugtnietG’s letters.

199 The second matter in this group of four was the Tribunal’s finding that Sascha Frugtniet had permitted Travel Action to operate without an appropriately qualified manager, thereby breaching s 36 of the TA Act (as to which, see [21] above). It held, however, at [130] that this provision is ‘addressed to the licensee, not to a person involved in the direction of the business’. It therefore made no mention of this matter in its judgment relating to Sascha Frugtniet.

200 Mr Elliott argued once again that the Tribunal erred in putting to one side a matter that it should have treated as relevant. It should, he said, have held that this breach had significant adverse implications for Sascha Frugtniet, since he was in control of Travel Action, as well as for Travel Action itself. The Tribunal’s approach implied, incorrectly in his submission, that a matter which fell within s 20(1)(c) of the TA Act, and was therefore relevant in determining whether disciplinary action should be taken under s 21(1) against a licensee, could not also be taken into consideration under s 20(1)(i) – i.e., in determining whether a person involved in the direction, management or conduct of a business to which the licence relates was not a fit and proper person to be so involved.

201 Mr Frugtniet’s response was that it would have been ‘duplicitous’ for the Tribunal to take the temporary absence of a qualified manager into account in assessing the behaviour of Sascha Frugtniet as well as of Travel Action itself. This failure to comply with s 36 was, he said, relevant only to the standard of conduct of Travel Action, the holder of the licence to carry on the business of travel agent.

202 The third matter was that, in his evidence to the Tribunal, Sascha Frugtniet denied that he knew Ms Collins to have left Travel Action before Mr Mignacca asked him at Travel Action’s office where she was. A significant implication of the Tribunal’s finding that he did know she had left was that he had lied under oath to the Tribunal. In Mr Elliott’s submission, the Tribunal should have taken this into account in determining fitness and propriety, but did not do so.

203 In so far as Mr Frugtniet’s submissions contained a response on this matter, it was his reference to Sascha Frugtniet’s account of his conversation with Mr Mignacca, set out in his letter of 21 May 2002. We have already mentioned this, at [192].

204 Fourth and finally, the Tribunal recorded at [117] that Sascha Frugtniet had been involved in the management and direction of Travel Action ‘at least since 18 February 2002’. This meant, in Mr Elliott’s submission, that the conduct on his part prompting a significant number of adverse findings against him had occurred in a very short space of time. At most, this period could be designated as slightly less than fifteen months, since the last day on which the Tribunal took evidence in these proceedings was 6 May 2003. The Tribunal did not, however, make any comment to this effect.

205 Mr Frugtniet did not specifically address this question.

206 Mr Elliott submitted that when these additional findings were taken into account in addition to those on which the Tribunal based its conclusion, it was clear that Sascha Frugtniet had indeed been shown not to be fit and proper to be involved in the direction, management or conduct of a travel agency.

207 Relying on dicta of the High Court in Hope v Council of the City of Bathurst (1980) 144 CLR 1 at 7, Mr Elliott maintained that the question whether the facts as found by a court or tribunal satisfy a statutory criterion of fitness and propriety is a question of law. He acknowledged, however, that in subsequent cases, notably Vetter v Lake Macquarie City Council [2001] HCA 12, a more complex and, indeed, confusing set of principles regarding the distinction between questions of law and questions of fact had emerged. If we were to decide that no error of law had been made out, he submitted, we should nonetheless grant leave to extend the appeal to the merits and should conclude that the Tribunal’s factual findings provided a persuasive basis compelling the conclusion that Sascha Frugtniet was presently not a fit and proper person to be involved in the direction, management or conduct of a travel agency.

208 With reference specifically to the content of statutory tests of fitness and propriety, Mr Elliott cited the High Court’s observations in Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127 at 156-157, to the effect that three characteristics are required, namely, ‘honesty, knowledge and ability’

209 He referred us also to a passage in the decision of the Commercial Tribunal in Young Taek Chong v Tomazin (1994) ASC 56-283 at 58. The principal points made in it are these: that the question must be determined with reference to the particular purposes of the regulatory regime involved; that account must be taken of the minimum standards of the profession or occupation being regulated; that 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; that 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; and finally that ‘the evaluation of fitness involves a wide discretion’.

210 Mr Frugtniet did not specifically address us on these legal issues.

Our conclusions regarding Sascha Frugtniet

211 The threshold issue confronting the Commissioner, as Appellant, is whether it has established, or at least sufficiently alleged, an error of law by the Tribunal. This follows from the terms of s 113(2) of the ADT Act, which are set out at [13] above.

212 In our judgment, the Commissioner has in fact established an error of law. It is an error of a type referred to in its Notice of Appeal but not given primary emphasis by Mr Elliott. His principal submission, which we have just outlined, was that the Tribunal’s erroneous finding in Sascha Frugtniet’s favour was an error of law because the question whether the facts as found by a court or tribunal satisfy a statutory criterion of fitness and propriety is a question of law.

213 A major component of his argument to us was, however, that in reaching its conclusion the Tribunal omitted to take into account four significant matters that were relevant to the issue of fitness and propriety. As outlined above at [193 – 205], these were (a) Sascha Frugtniet’s unfounded allegations of bad faith against, and failure to co-operate with, investigating officers; (b) his conduct in permitting Travel Action to carry on business without a qualified manager; (c) his having given false evidence to the Tribunal itself regarding the absence of Ms Collins from the office of Travel Action; and (d) the shortness of the period during which his inappropriate conduct while in control of Travel Action occurred.

214 In our opinion, matters of this nature are indeed relevant, and indeed would be required to be taken into account, in the determination of fitness and propriety to be involved in the business of a travel agency. This appears to us to follow from the broad principles governing fitness and propriety to which we have referred at [208 – 209] above. In addition to the two cases there cited, there are of course very many other authorities dealing with this statutory criterion. Notable among these is Australian Broadcasting Tribunal v Bond (1990) 170 CLR 1, to which the Tribunal referred in its judgment at [11] and [13]. None of them contains any statement significantly contradicting what we have set out above. We take account also of the Tribunal’s statement, at [12], that ‘the ends to be served by the regulation of travel agents include the “protection of the travelling public”’.

215 In exercising its ‘wide discretion’ (see [209] above]) in assessing fitness and propriety, the Tribunal’s failure to take account of these four considerations which we have held to be relevant must, in our judgment, be regarded as an error of law. It is sufficient for us to quote three authorities in support of this conclusion.

216 First, we refer to the following well-known statement by Dixon, Evatt and McTiernan JJ in the High Court in House v King (1936) 55 CLR 499 at 505:-

if he does not take into account some material consideration

217 Secondly, we cite the principles set out by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-42.

218 Thirdly, we refer to the Appeal Panel’s decision in Lloyd v TCN Channel Nine Pty Ltd [1999] NSWADTAP 3. At [45], the Appeal Panel quoted the above passage from House v King. At [46], with specific reference to the interpretation and application of s 113(2) of the ADT Act, it said:-

If the Tribunal made such errors in exercising its discretion, that constitutes an error of law which is properly the subject of an appeal on questions of law.

219 Having held that the Tribunal erred in law in the manner that we have outlined, we rule further that, as was sought by the Commissioner in its Notice of Appeal, we should grant leave for the appeal to extend to the merits. The evidence available to us regarding (a) the two matters which the Tribunal did take expressly into account (see [185 – 192] above) and (b) the four further matters of relevance that it omitted to consider is sufficiently comprehensive to enable us to reach our own conclusion on the issue of fitness and propriety.

220 We have reviewed this evidence, comprising portions of both the documentary material admitted by the Tribunal and the transcript of the hearings that it conducted.

221 The first of the two matters which the Tribunal took expressly into account was the conduct of Sascha Frugtniet in detaining and harassing Mr Whittaker and Mr Grahame when they visited the office of Travel Action on 12 December 2002. In this connection, we agree with Mr Frugtniet that Sascha Frugtniet played a subordinate role to that of Brian Frugtniet on that occasion. Although Sascha Frugtniet, before Brian Frugtniet’s arrival, challenged Mr Grahame’s authority and asked him to leave, it was Brian Frugtniet who initiated the detention of the two officers. Thereafter Sascha Frugtniet appears to have acted under the direction of his father.

222 The second of these two matters was Sascha Frugtniet’s false statement to Mr Mignacca and Mr Anderson on 20 May 2002 that Ms Collins was sick. The Tribunal found that he made this statement in an attempt to hide the fact that she had not been in attendance. We regard this as the most serious finding made against Sascha Frugtniet. As the Tribunal clearly believed, it is of significant weight in the assessment of fitness and propriety.

223 The first of the four matters which the Tribunal did not take into consideration was Sascha Frugtniet’s implausible allegations of bad faith against, and failure to co-operate with, investigating officers, as evidenced particularly in his letter of 21 May 2002 to Mr Mignacca. The letter is hostile in tone and contains extravagant allegations for which the factual foundation is clearly open to question. The claim that notice in writing should be given if any records are to be inspected shows a degree of unwillingness to co-operate with inspectors. But overall the letter can be characterised as a somewhat ineffective outpouring of anger at being subjected to official inspection. No threats carrying any conviction are conveyed and, as Mr Frugtniet pointed out, nothing in the letter appears to have prompted Mr Mignacca to respond to its contents. Our view therefore is that these issues, while relevant to the determination of fitness and propriety, are not of major significance.

224 The second matter not considered by the Tribunal was Sascha Frugtniet’s role in permitting Travel Action to operate without a manager. So long as it is distinguished from the separate issue, which we have just considered, of his having misled Mr Mignacca on this topic, we would say that, while significant, it must be seen in perspective as causing Travel Action to commit a single breach of a regulatory requirement, lasting for a relatively short period of time. As is clear from this, we reject Mr Frugtniet’s submission that it is ‘duplicitous’ to take this matter into account against Sascha Frugtniet as well as against Travel Action.

225 The third matter to be considered is the false evidence given by Sascha Frugtniet to the Tribunal regarding the absence of Ms Collins from the office of Travel Action. We see this as compounding what we have already held to be the most serious finding made against him. It is of significant weight in the assessment of his fitness and propriety.

226 The fourth and final matter is the relatively short period – at most, a little less than fifteen months – during which the relevant conduct of Sascha Frugtniet occurred. While this is, as we have said, a matter to be taken into account, we would not go so far as to say that the five separate incidents involved amount to ‘deliberate prolonged conduct or a course of conduct’ within the meaning of the passage cited at [209] above from Young Taek Chong v Tomazin.

227 We have weighed up all these matters in this review of the merits of the appeal. We note also that we consider that the finding sought by the Commissioner against Sascha Frugtniet is a very serious one. By virtue of the terms of s 21(1) and (2) of the TA Act, the only penalty that may be imposed is one of disqualification, either permanently or for a specified period. A lesser option, such as reprimand, is not available.

228 Our conclusion is that, while our consideration of the four further matters outlined above evidently strengthens the Commissioner’s case, it has not been proved to our satisfaction that Sascha Frugtniet is not a fit and proper person to be involved in the direction, management or conduct of a travel agency.

229 We therefore dismiss the Commissioner’s appeal against the Tribunal’s decision in favour of Sascha Frugtniet.

DECISION 4: TRAVEL ACTION

The arguments raised

230 The Tribunal overturned the Commissioner’s decision under s 21(1) of the TA Act to cancel Travel Action’s licence and disqualify it from holding a corporate license for ten years. It expressed its reasons for so doing at [196], in the following terms:-

The only adverse finding I have made in relation to Travel Action Pty Ltd is that it failed to comply with the Act by not having a qualified manager present and in charge of the business for certain periods. Given the circumstances of these breaches and the relatively short period of time involved, disqualification even for a limited period is not appropriate. Instead, the corporate licensee should be reprimanded, pursuant to s 21(1)(a), for its failure to comply with the Act.

231 The Commissioner had also found that Travel Action had insufficient financial resources to enable it to carry on business as a travel agent. This is stated in s 20(1)(e) of the TA Act to be a ground for cancellation of a licence or other action under s 21(1). The Tribunal found, however, that this allegation was not made out.

232 The third and final basis on which the Commissioner relied was the involvement of Suzanne, Brian and Sascha Frugtniet in the business of Travel Action. The Commissioner submitted to the Tribunal that, by virtue of its findings that Suzanne and Brian Frugtniet were unfit to be so involved, but that they were in fact involved, it should declare Travel Action, pursuant to s 20(1)(i), to be unfit to hold a licence.

233 At [195], the Tribunal rejected this argument in the following terms:-

I do not accept this submission. I have affirmed the decisions of the Commissioner in relation to Suzanne and Brian Frugtniet. Consequently, they cannot be involved in the business of Travel Action Pty Ltd or any other travel agency. In relation to Sascha Frugtniet, I have set aside the Commissioner’s decision and found that he is a fit and proper person to be involved in the travel agency business.

234 In its appeal, the Commissioner put forward four grounds.

235 First, it claimed that the Tribunal, having found that Travel Action had breached the TA Act’s requirement of maintaining an appropriately qualified manager and that this, by virtue of s 20(1)(c) of the Act, gave grounds for disciplinary action under s 21(1), imposed the ‘manifestly inadequate penalty’ of a reprimand.

236 The requirement of a manager is set out in s 36 of the TA Act. This section is reproduced above at [21].

237 The prescribed qualifications appear in Regulation 18 of the Travel Agents Regulation 1981. These need not be reproduced.

238 The relevant finding of the Tribunal, at [165], was that Travel Action was in breach of s 36 for a period of one month, from 20 April to 19 May 2002.

239 Mr Elliott argued that the circumstances of the breach were serious, for two reasons. First, the Tribunal found, at [159 – 160], that during a visit to Travel Action’s office on 18 March 2002, Mr Mignacca advised Sascha Frugtniet that Travel Action could not legally trade without a qualified manager. He confirmed this advice by a letter dated 19 March. Sascha Frugtniet was therefore on notice, merely one month before the breach, that a manager was required. The second reason urged by Mr Elliott was the lack of candour by Sascha Frugtniet, both in speaking to Mr Mignacca and in giving evidence to the Tribunal, regarding his awareness of Ms Collins’ departure from employment with Travel Action (see [189 – 192, 202 – 203] above).

240 Mr Elliott submitted that for these reasons the breach of s 36 by Travel Action was not a ‘mere technical breach’, but warranted a ‘significant disciplinary measure’. Citing Health Care Complaints Commission v Pham [1999] NSWCA 39, he argued further that the imposition of a clearly inadequate penalty in a disciplinary proceedings constituted a ‘reviewable error’.

241 In response, Mr Frugtniet claimed that there was nothing in the Tribunal’s outline of the relevant events (at [156 – 166]) to suggest that Travel Action’s breach of the Act was ‘outrageous’ or indeed serious. No severe penalty was therefore warranted. He also submitted, as he had done before the Tribunal, that because s 36 created a criminal offence, disciplinary action founded on a breach of the section was not permitted unless the offence itself had been prosecuted and a conviction recorded.

242 In our judgment, none of the considerations urged by Mr Elliott are sufficient to warrant our holding that the penalty of reprimand imposed by the Tribunal was ‘manifestly inadequate’. We would in fact concur, broadly speaking, with the characterisation put forward by Mr Frugtniet. We reject, however, as did the Tribunal at [149 – 150], his argument that no finding could be made against Travel Action under s 20(1)(c) unless it had been convicted of the offence created by s 36.

243 For these reasons, we find no error of law arising from the Commissioner’s first ground of appeal.

244 The Commissioner’s second ground was that the Tribunal erred in failing to take proper account of the likelihood that Suzanne Frugtniet and Brian Frugtniet, although disqualified by the orders that it made against them, would continue to be involved in the conduct of Travel Action’s business.

245 In developing this argument, Mr Elliott first drew our attention to a number of specific findings of the Tribunal indicating that at all material times Suzanne Frugtniet and Brian Frugtniet had a ‘close connection’ with Travel Action. There was, he argued, no evidence to support a finding that they would cease to be involved. It was insufficient in this connection merely to rely, as the Tribunal did at [195], on an assumption that its orders disqualifying them would in fact prevent them continuing to be involved.

246 Mr Elliott further relied on the following passage at [146] in the Tribunal’s judgment relating to Sascha Frugtniet:-

Sascha Frugtniet admitted that because he has a close knit family it would be virtually impossible for him to tell his mother not to be involved in the business and that he intended to continue to allow her to be involved. He will have to change his mind on this point if he wants to continue to work in the travel industry.

247 According to Mr Elliott, the first sentence in this passage directly contradicted the Tribunal’s assumption that Suzanne Frugtniet, at least, would cease to be involved in the business of Travel Action on account of her disqualification if Sascha Frugtniet were not also disqualified. The second sentence had, he said, no support from the evidence. The Tribunal was ‘giving advice which Mr Sascha Frugtniet had no intention of adopting’. By taking this consideration into account, the Tribunal therefore went beyond what it could properly take into account. This, as held by the High Court in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-42, amounted to an error of law.

248 Mr Frugtniet’s response was, first, that there was no basis on which the Tribunal could or should have inferred that Suzanne Frugtniet and Brian Frugtniet, in disobedience of the orders of disqualification made against them, would seek to be involved in the future in the business of Travel Action. Secondly, he maintained that the second sentence in the passage just quoted from the Tribunal’s judgment at [146] was no more than a ‘comment’ that did not purport to be based in evidence.

249 We agree with Mr Frugtniet. We see dangers in basing the cancellation of a licence or the disqualification of a licensee on the assumption that persons who have been disqualified will continue unlawfully to maintain an involvement in the business. If this assumption proves later to be well founded, there will be grounds for subsequent action against both the licensee and the persons concerned. But the decision by the Tribunal not to anticipate such developments appears to us to be correct and certainly not to involve an error of law.

250 The Commissioner’s third ground depended upon our upholding its appeal against the Tribunal’s decision in favour of Sascha Frugtniet and concluding that there was therefore a case against Travel Action under s 20(1)(i) of the Act. As we have dismissed that appeal, this ground fails.

251 Fourthly, Mr Elliott argued that the Tribunal, in determining the action to be taken under s 21(1) against Travel Action, should have considered the foregoing matters in combination. Our rejection of these three separate grounds of appeal appears to us, however, to deprive this fourth argument of any force.

252 We therefore dismiss the Commissioner’s appeal against the Tribunal’s rulings (a) that the Commissioner’s decisions to cancel the licence of Travel Action and disqualify it for ten years must be set aside and (b) that a reprimand was a sufficient penalty for its failure to comply with s 36 of the Act.

THE ORDERS TO BE MADE

253 For the foregoing reasons, all four appeals are dismissed.

CITATION:	Frugtniet and Anor v Commissioner for Fair Trading; Commissioner for Fair Trading v Travel Action Pty Ltd and Anor (GD) [2004] NSWADTAP 12
PARTIES:	APPELLANT: Brian Frugtniet; Suzanne Frugtniet RESPONDENT Commissioner for Fair Trading APPELLANT Commissioner for Fair Trading RESPONDENT Travel Action Pty Ltd; Sascha Frugtniet
FILE NUMBER:	039074,039075, 038076, 039077
HEARING DATES:	19/02/2004-20/02/2004
SUBMISSIONS CLOSED:	02/20/2004
DATE OF DECISION:	04/16/2004
DECISION UNDER APPEAL:	Travel Action Pty Ltd; Sascha Frugtniet; Suzanne Frugtniet and Brian Frugtniet v Commissioner for Fair Trading [2003] NSWADT 2223
BEFORE:	Chesterman M - ADCJ (Deputy President); Montgomery S - Judicial Member; Antonios Z - Member
CATCHWORDS:	admissibility of evidence - finding contrary to evidence - penalty - manifestly inadequate - procedural fairness - relevant/irrelevant considerations - standard of proof - statutory interpretation
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	023209, 023230, 023231, 023232
DATE OF DECISION UNDER APPEAL:	09/24/2003
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Evidence Act 1995 Migration Act 1958 (Cth)
CASES CITED:	Australian Broadcasting Tribunal v Bond (1990) 170 CLR 1 Briginshaw v Briginshaw (1938) 60 CLR 336 Browne v Dunn (1893) 6 R 67 Commissioner for Fair Trading v Travel Action Pty Ltd [2003] NSWADTAP 69 Devries v Australian National Railways Commission (1993) 177 CLR 472 Galea v Galea (1990) 19 NSWLR 263 Health Care Complaints Commission v Pham [1999] NSWCA 39 Hope v Council of the City of Bathurst (1980) 144 CLR 1 House v King (1936) 55 CLR 499 Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127 Jones v Dunkel (1959) 101 CLR 298 Lloyd v TCN Channel Nine Pty Ltd [1999] NSWADTAP 3 Manila Marketing Pty Ltd v Travel Compensation Fund, Unreported, Commercial Tribunal of NSW, 27 March 1995 (No. 1116 of 1993) Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Re Minister for Immigration and Multicultural Affairs Ex Parte Applicant S154/2002 [2003] HCA 60 Muralidharan v MIEA (1996) 62 FCR 402 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1993) 67 ALJR 170 Sabag v Health Care Complaints Commission [2001] NSWCA 411 Secretary of the Department of Veterans' Affairs v Studdert [2001] FCA 1642 Travel Action Pty Ltd; Sascha Frugtniet; Suzanne Frugtniet and Brian Frugtniet v Commissioner for Fair Trading [2003] NSWADT 223 Vetter v Lake Macquarie City Council [2001] HCA 12 Waterford v Commonwealth (1987) 163 CLR 54 YG & GG v Minister for Community Services [2002] NSWCA 247 Young Taek Chong v Tomazin (1994) ASC 56-283
REPRESENTATION:	APPELLANT R Frugtniet, agent for Brian and Suzanne Frugtniet APPELLANT G Elliott, barrister, for Commissioner for Fair Trading RESPONDENT G Elliott, barrister, for Commissioner for Fair Trading RESPONDENT R Frugtniet, agent for Travel Action Pty Ltd & Sascha Frugtniet
ORDERS:	Each appeal is dismissed