Institoris v Commissioner for Fair Trading

[2014] NSWCATAD 219

NSW Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Institoris v Commissioner for Fair Trading & Anor [2014] NSWCATAD 219
Hearing dates:	21 October 2014
Decision date:	21 October 2014
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	S Montgomery, Senior Member
Decision:	The application for a stay of the decision to refuse to grant the Applicant operator's licences under the Tattoo Parlours Act 2012 is refused.
Catchwords:	CIVIL AND ADMINISTRATIVE TRIBUNAL - administrative review jurisdiction - security determination under Tattoo Parlours Act 2012 - application for operator's licence refused - stay application
Legislation Cited:	Administrative Decisions Review Act 1997 Tattoo Parlours Act 2012
Cases Cited:	AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81
Category:	Interlocutory applications
Parties:	Steve Istvan Institoris (Applicant) Commissioner for Fair Trading (First Respondent) Commissioner of Police, NSW Police Force (Second Respondent)
Representation:	John Stonham & Co, Lawyers (Applicant) Crown Solicitors Office (First and Second Respondents)
File Number(s):	1410588
Publication restriction:	Section 75(2) of the Administrative Decisions Tribunal Act 1997 applies to those paragraphs of these reasons identified as '[not for publication]'. Those paragraphs are not to be released to the Applicant or the public.

reasons for decision

1. A delegate of the Director-General for Fair Trading ("the Director-General") refused the Applicant's application for an operator's licence under the Tattoo Parlours Act 2012 ("the Act"). He had been operating a number of tattoo parlours without the need for a licence but was required to cease trading as a consequence of the determination. He ceased trading on 6 October 2014. He applied to the Tribunal for a stay of that decision so that he could continue to operate until the Tribunal makes a final decision as to whether he should be licenced.

1. The determination relates to four tattoo parlours ("the parlours") as follows:

(a)   Yakuza Tattoo at Narellan ("the Narellan shop");

(b)   Yakuza Tattoo at Campbelltown ("the Campbelltown shop");

(c)   Yakuza Tattoo at Wollongong ("the Wollongong shop"); and;

(d)   Inkhouse at Macarthur Square ("the Macarthur Square shop").

1. Those tattoo parlours were operated by the company Yakuza Tattoo Pty Ltd ("the company"). The company was incorporated in July 2010, with the Applicant as the sole Director/Secretary and the sole shareholder. Prior to that date, the Applicant operated each of the tattoo parlours as a sole trader.

1. When the Applicant applied for the licence, the Commissioner of Fair Trading referred the application to the Commissioner of Police ("the Commissioner").

1. Section 19(1) of the Act allows the Commissioner to determine whether an applicant is a fit and proper person to be granted a licence and whether it would be contrary to the public interest for the licence to be granted. In making that determination the Commissioner may have regard to any "criminal intelligence report or other criminal information held in relation to an applicant." But, under s 19(3), the Commissioner may only have regard to a report or information that:

(a) is relevant to the business or procedures proposed to be carried on or performed, or carried on or performed, under the licence, or

(b) causes the Commissioner to conclude that improper conduct is likely to occur if the applicant were granted the licence or the licensee continued to hold the licence, or

(c) causes the Commissioner not to have confidence that improper conduct will not occur if the applicant were granted the licence or the licensee continued to hold the licence.

1. The Applicant is a member of Rebels Outlaw Motorcycle Gang ("OMCG"). He has no criminal record. He previously held a Firearms Licence, which was revoked in July 2003. The Commissioner made an adverse security determination about the Applicant based on confidential criminal intelligence. In those circumstances, the Director-General was obliged to refuse the application.

Power to stay a decision

1. The Tribunal may make an order "staying or otherwise affecting" the operation of the decision. Section 60 of the Administrative Decisions Review Act 1997 provides:

(1) Subject to this section, an application to the Tribunal for an administrative review under this Act of an administratively reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision.

(2) On the application of any party to proceedings for an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application.

(3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account:

(a) the interests of any persons who may be affected by the determination of the application, and

(b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and

(c) the public interest.

(4) While an order is in force under this section (including an order that has previously been varied on one or more occasions under this subsection), the Tribunal may, on application by a party to the proceedings, vary or revoke the order by another order.

1. In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 ("AVS v Police") the Court of Appeal found that section 60(2) is wide enough to enable the Tribunal temporarily to reinstate a licence that has been revoked. The Tribunal therefore has power to make an order which has the effect of temporarily granting an operator's licence to enable the situation prior to the decision to continue.

The issue for the Tribunal

1. A threshold issue for the Tribunal is whether it is appropriate to grant a stay to "secure the effectiveness of the determination of the application". In AVS v Police the Court of Appeal explained at paragraph [129]:

The purpose of granting a stay or other order is connected with the determination of the application. "[S]ecur[ing] the effectiveness of the determination of the application" involves matters such as ensuring that the lapse of time before the determination is actually made does not deprive the review of practical point

1. In the present matter the Applicant contends that if a stay of the decision is not granted he will be deprived of the benefit of a favourable decision in the substantive matter because the consequences of the decision for his businesses.

1. Pursuant to section 27(3)(a) of the Act the Commissioner is a party to the proceedings. In this matter, both the Commissioner and the Director-General were represented separately. However, the Commissioner took a far more active role in the proceedings than did the Director-General.

1. The hearing was mostly conducted openly however the Commissioner presented some material on a confidential basis and the Applicant was excluded from that part of the proceedings. I do not propose to discuss any material that was presented on a confidential basis in open reasons. Those parts of the reasons that are not to be disclosed are identified as "[not for publication]".

The Applicant's evidence

1. The Applicant's interests are his financial and personal interests in continuing to operate his businesses. His evidence was that his only source of income was from the operation of the parlours. At the time of closure the weekly gross takings of the parlours was in the vicinity of $28,000 - $35,000 depending on time of year. The average weekly expenditure in relation to the parlours was in the vicinity of $2300.

1. He provided the following information in regard to the parlours:

(1)   The Wollongong shop

The Applicant's evidence was that he opened the Wollongong shop about 8 years ago. The shop is operated from leased premises. Rent payable on the premises is $3,121.34 per month. The Lease is due to expire in about two years.

(2)   The Narellan shop

The Applicant's evidence was that he acquired the Narellan shop in about 2008. The shop operates from premises owned by the company. The company purchased the premises in about September 2013. The premises were financed through a loan from the National Australia Bank. Monthly repayments under the loan are a minimum of $3,000. The outstanding balance of the loan is about $222,000.

.

(3)   The Campbelltown shop

The Applicant's evidence was that he acquired the Campbelltown shop in or about July 2008/2009. The shop is operated from leased premises. Rent payable on the premises is $3,249 per month. The Lease is due to expire in October 2015.

(4)   The Macarthur Square shop

The Applicant's evidence was that he opened the Macarthur Square shop almost 5 years ago. The shop is operated from leased premises. Rent payable on the premises is around $5,000 per month. The Lease is due to expire in November 2019.

1. The Applicant relies on correspondence from the Retail Manager at Macarthur Square indicating that the closure of the Macarthur Square shop represents a breach of the Lease Agreement.

1. At the time of closure, there were fifteen tattooists working from the parlours as independent contractors paying commission to the shops on a 50/50 basis. He stated that to the best of his knowledge the tattooists are all fully licenced and none had any other source of income.

1. He stated that in the time he has operated the parlours, he has never had any trouble with any authority related to the operation of any of the parlours, except for the alleged incorrect spelling of a word in a tattoo about five years ago.

1. The Applicant stated that he is suffering significant financial hardship as a result of the decision to refuse to grant the licence application and the closure of the parlours. He provided details in regard to his personal circumstances and documentary evidence in regard to much of his asserted expenses.

1. He completed his schooling to year 12 and attained the HSC. He also completed a basic Electronics Certificate when employed by Aristocrat as Poker Machine Technician. He has previously worked as a hotel manager and held a security guard licence.

1. He currently owes in the vicinity of $285,000 on the mortgage over his residence and makes week repayments of $750. He also makes child support payments of $1,372.49 per month through the child support agency with a private arrangement in relation to another child.

1. He is also aware of a debt of approximately $4.4 million asserted to be owed to the Australian Taxation Office. He is seeking advice from legal counsel and a new accountant in regards to the asserted debt.

1. He estimated his weekly personal expenses to be in the vicinity of $1150.

1. Since the closure of the parlours he has no source of income and has had to rely on his personal savings of approximately $10,000 and loans from his mother.

1. I accept that the Applicant's prospects of employment in any other occupation in the short term are poor.

1. According to the Applicant, he has no criminal record and that he is not now and nor has he ever been involved in organised crime or indeed criminal activity of any type. He submits that there is no risk to the public interest if he continues to operate his tattoo businesses.

The Respondents' evidence

1. The Director-General did not take an active role in the proceedings. The case for the Respondents was undertaken by the Commissioner.

1. Mr Mantziaris made open submissions but also relied on confidential information and confidential submissions.

Confidential information

1. [Not for publication].

1. [Not for publication].

1. The Commissioner further contends that company has not complied with taxation legislation requirements with respect to tax returns. The ATO assessment reflects the ATO's view that the company has been used for purposes that has generated undeclared income.

1. [Not for publication].

1. Material that falls within description of "criminal intelligence report or other criminal information" for the purposes of section 19(1) of the Act need not be disclosed. For the purposes of these proceedings I have not disclosed it.

1. [Not for publication].

Public interest

1. The Commissioner submitted that it would be contrary to the public interest for a licence to be granted to the Applicant for the reasons that he is a member of the Rebels. The Commissioner contends that OMCGS, including the Rebels, pose a significant criminal threat to the community and public safety. In particular, OMCGs have a proven propensity for extreme violence in support of their interests. It is submitted that there is a public interest in removing criminal elements from the tattoo industry and thereby protecting other operators or employees in the tattoo industry. The Commissioner further contends that there is a public interest in ensuring public confidence in the standards of this newly regulated industry. The involvement of OMCGs in the tattoo industry brings it into disrepute and lessens public confidence in it.

1. [Not for publication].

1. The Commissioner submitted that it would be contrary to the public interest for a licence to be granted to the Applicant for the reason that he has not complied with taxation legislation.

1. The Commissioner further submitted that the Applicant's personal interest in being granted the operator licences, which would enable him to carry on body art tattooing businesses, is substantially outweighed by the public interest against granting him the licences.

Conclusion

1. The Applicant has been operating tattoo parlours for many years. Under the new legislative scheme he now requires a licence. The Commissioner has refused his application for a licence based, to some extent, on criminal intelligence information. That information has not been disclosed to the Applicant.

1. Based on all the evidence, I am satisfied that it is contrary to the public interest for the Applicant to be permitted to continue operating his business between now and the date on which the Tribunal determines his application.

1. [Not for publication].

1. The Applicant has a strong financial and personal interest in continuing to operate his business. However, in my view there is significant risk to the public interest in the short term if he is permitted to continue trading.

Order

The application for a stay of the decision to refuse to grant the Applicant operator's licences under the Tattoo Parlours Act 2012 is refused.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 11 December 2014