Lassen v Bathgate - [2011] WASC 54

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CRIMINAL

CITATION: LASSEN -v- BATHGATE [2011] WASC 54

CORAM: MURRAY J

HEARD: 24 FEBRUARY 2011

DELIVERED : 1 MARCH 2011

FILE NO/S: SJA 1113 of 2010

BETWEEN: JAMES LASSEN
Appellant
AND
CLAIRE ELEANOR BATHGATE
Respondent

ON APPEAL FROM:
Jurisdiction              :  MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram  :MAGISTRATE S R MALLEY
File No  :PE 35185 of 2010

Catchwords:

Regulatory offence - Acting as a crowd control agent without a licence - Licence obtained on behalf of a company - Licensee acted on his own behalf under a separate business name - Whether he acted without authority of his licence

Legislation:

Security and Related Activities (Control) Act 1996 (WA), s 36

Result:

Appeal dismissed with costs

Category: A

Representation:

Counsel:

Appellant: Mr G T Stubbs
Respondent: Mr T C Russell

Solicitors:

Appellant: Perth City Legal
Respondent: State Solicitor for Western Australia

Case(s) referred to in judgment(s):

Channel 7 Perth Pty Ltd v S (A Company) [2007] WASCA 122; (2007) 34 WAR 325
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194
Federal Commissioner of Taxation (1971) 127 CLR 106
Julius v Lord Bishop of Oxford [1880] 5 AC 214
Ostrowski v Palmer [2004] HCA 30; (2004) 218 CLR 493
Ward v Williams (1955) 92 CLR 496

MURRAY J:

The charge and the facts

The prosecution notice in this case charged the appellant that between 27 September and 11 October 2009 at Mount Hawthorn, he acted as a crowd control agent without the authority of a crowd control agent's licence, contrary to s 36 of the Security and Related Activities (Control) Act 1996 (WA). He was convicted after a trial in the Magistrates Court which was held on 11 October 2010. He was fined $500, ordered to pay the prosecution's costs of $119.20 and a spent conviction order was made to prevent the matter becoming a matter of record against the appellant's name.
The facts of the case, as established by the evidence at the trial and as found by the magistrate, are as follows. On 13 January 2009, the appellant applied for a crowd control agent's licence for a period of three years. In the part of the application concerned with his 'business details' he said that he applied on behalf of a corporation named Equanimity Investments Pty Ltd trading as the Empyrean Group. The business address was given as 14 Lake Street, Northbridge, which the applicant also gave as his postal address. He gave a different address as his residential address. In the section of the application concerned with his personal history he revealed that he had also been known as James Fitzgerald Ryan.
A licence was issued for a three year period and it appears to have been backdated. The expiry date was given as 27 February 2011. The licence is in the appellant's name, giving a private residential address, and it says that the appellant is licensed on behalf of the Empyrean Group, giving the Northbridge business address. The licence states:
Your Crowd Control Agent's Licence authorises you to supply licensed crowd controllers in accordance with the provisions of the Security and Related Activities (Control) Act 1996 and subject to the following conditions and restrictions imposed by the Licensing Officer.
The conditions and restrictions which are then set out in the licence are not relevant for the purpose of these proceeding.
The prosecution called the managing director of a company which owned and operated a wine bar and bistro called The Cabin, in Mount Hawthorn. It will be recalled that the offence was allegedly committed in Mount Hawthorn. This witness said that he had been in the habit of using crowd controllers provided by an organisation he called Empyrean. In September 2009, he received an email, ostensibly from a person named Patrick Ryan of Empyrean. The relationship between this person and the appellant was unclear, although it will be noticed that in his application made in January 2009, for a crowd control agent's license, the appellant had said that Ryan was a name that he had been known by.
The witness said that as a result of this communication he had to find a crowd controller supplied by someone other than Empyrean. Without exception, it seems that the prosecutor and prosecution witnesses drew no distinction between the business name and the company Equanimity Investments Pty Ltd which traded under that name.
The manager of The Cabin said that shortly afterwards, he was telephoned by the appellant, with whom he had been used to dealing in relation to security services. The appellant told him that he would now be able to get security services through a 'company' called Phoenix Crowd Control and that he would still be able to use the guard who had previously been supplied to him (ts 11).
That arrangement having been made, the witness said that security services were provided for the weeks ending 27 September, 4 October and 11 October 2009. A tax invoice was received dated 12 October 2009. It was headed 'Phoenix Crowd Control' and gave an address in Morley which was not the business address of Equanimity Investments Pty Ltd, the Empyrean Group, or the residential address given by the appellant on his application for a licence. The tax invoice made no reference to the Empyrean Group or the company which operated that business name.
The appellant gave evidence. He gave as his address, the address in Morley, which appeared at the head of the tax invoice. His evidence was that he had made the application for the crowd control agent's licence on behalf of Equanimity Investments Pty Ltd trading as the Empyrean Group. He said he was a director of the company at that time and that remained the position. There is no evidence before the court of the number of offices the company had at any given time. The appellant accepted that the licence, to which I have referred, was that issued to him upon the application which had been made.
He gave the following evidence (ts 21):
And can you tell us what it was in August and September of 2009 that changed between yourself and the company?‑‑‑In around - well, September the 23rd ‑ ‑ ‑
Yes?‑‑‑I ceased working for the Empyrean Group.
Yes?‑‑‑I was still a director of Equanimity Investments at that time, and I decided to change the trading name to Phoenix Crowd Control.
Okay, and when was it that you decided to change the trading name?‑‑‑Well, I actually registered the business on 7 October.
Okay?‑‑‑Or around about 7 October.
What happened with regard to The Cabin Wine Bar after you ceased employment with Equanimity?‑‑‑With the Empyrean Group?
Yes?‑‑‑I still continued on providing services of one crowd controller on a Friday and Saturday evening.
Mr Lassen went on to explain that that went on for a period of about three weeks. He considered he was still acting under the authority of the licence because he was still a director of the corporation. When cross‑examined, he made it clear that when he was an employee of the business, he had particular responsibility for the security business. He said that his father had started the company in about 2007 and he and his brother became directors in 2008. Although he remained a director after he ceased to be an employee, he decided to change the trading name to Phoenix Crowd Control and that was a decision he made on his own without consulting his father and brother (ts 23).

The reasons of the magistrate

There is an element of complaint in the grounds of the appeal that the magistrate failed to properly explain the reasons why he convicted. In my opinion no such complaint can be made good. His Honour gave his reasons extemporaneously. They were short, although they built upon exchanges between his Honour and counsel for the defendant in the course of final submissions. There are points at which there is a certain lack of clarity in the reasons given. But in my opinion, a fair reading of them makes clear the ground upon which his Honour acted.
His Honour commenced by finding that there was no dispute that the appellant held the crowd control agent's licence at the relevant time, but that he did so on behalf of the Empyrean Group, the trading name of Equanimity Investments Pty Ltd of which he was a director. Even so, his Honour said:
if he operates a crowd controller business outside the ambit of the company umbrella then I find that he is not operating with the appropriate licence. In my view, that is specific to that company. (ts 31)
His Honour went on to make the findings, again on the basis of the undisputed evidence of the manager of The Cabin, that at the times alleged, by providing the services of a crowd controller the appellant acted as a crowd control agent. His Honour found that there was no evidence to support the appellant's suggestion that he had, 'somehow changed the trading name of Empyrean to Phoenix, and that he did this effectively off his own bat' (ts 31). That view, his Honour held, was inconsistent with the fact that the appellant had said that he personally would be arranging security for The Cabin and with the fact that the invoice was rendered by Phoenix Crowd Control at the appellant's address and not at the address of the company.
His Honour concluded:
I find the accused was the operator of Phoenix Crowd Control and it was not a business associated with Equanimity Investments Pty Ltd. As such any licence held was not valid and as such [the accused] acted without a licence at the relevant period. (ts 31)
Finally, his Honour added that any misunderstanding about his entitlement to act as a crowd control agent under the authority of the licence issued in his name, not as an officer of the company, but as the operator of the business Phoenix Crowd Control, could not be an honest and reasonable, but mistaken, belief in a matter of fact under s 24 of the Criminal Code (WA), but would be a mistake of law. As such, of course, it would provide the appellant with no defence. That view was undoubtedly correct: Ostrowski v Palmer [2004] HCA 30; (2004) 218 CLR 493.

The law

The establishment of a business name is governed by the Business Names Act 1962 (WA). A business name may be carried on by a natural person, a partnership or a corporation, but unless the business name consists of the name of each person carrying on business under that name without any addition, it must be registered: s 5(1). Changes of particulars relating to a registered business name and the cessation of business under that name, must be notified to the commissioner, the CEO of the department having the administration of the Act: s 12. It is by that means, upon registration, that a change may be made.
Of course, nothing like that occurred here. According to the appellant, he simply registered the business name, Phoenix Crowd Control, on about 7 October 2009, an act which did nothing to alter the business name registered to the company Equanimity Investments Pty Ltd, the Empyrean Group.
The long title of the Security and Related Activities (Control) Act (the Act) is as follows:
An Act to provide for the licensing of persons engaged in work relating to -
•the protection of persons and property;
•investigation or surveillance; and
•crowd control,
and of agents who supply the services of persons to carry out such work, to prohibit unauthorised persons from acting as armed bodyguards, and for related purposes.
When the Act is read, it is immediately apparent that it employs a system of licensing of security agents, security officers, others engaged in the industry of providing security, inquiry agents and investigators employed by them, crowd control agents and crowd controllers employed by those agents. The Act provides criteria by which the fitness of persons to hold such licences may be judged by the licensing authority, conditions and restrictions upon which licences may be held and a full set of powers controlling the activities of licensed persons who may, for example, be subjected to random drug testing by blood or urine analysis. A person for whom a licensed crowd controller is performing services authorised by the licence is to keep prescribed records so that such activity may be monitored: s 84.
Section 43 of the Act provides:
43.Natural persons only to be licensed
(1)A licence can only be issued to a natural person.
(2)A natural person may hold an agent’s licence on behalf of ‑
(a)a partnership if the natural person is one of the partners; or
(b)a body corporate if the natural person is an officer of the body,
and any business under that licence may be transacted in the name of the partnership or body.
Section 45 of the Act provides:
45.Automatic termination of licence held on behalf of partnership etc.
(1)An agent’s licence held by a person on behalf of a partnership terminates automatically if the person ceases to be one of the partners.
(2)An agent’s licence held by a person on behalf of a body corporate terminates automatically if the person ceases to be an officer of the body corporate.
In relation to a body corporate, the term 'officer' is defined in s 3 to mean:
(a)a director or secretary of the body;
(b)a person in accordance with whose directions or instructions the directors of the body are accustomed to act; and
(c)a person who is concerned in the management of the body, whether as an employee or in any other capacity;
A licence under the Act is not transferrable: s 65. It is an offence to dispose of a licence or identity card issued under the Act to any person, or to permit another person to use the licence or identity card: s 79. It is very apparent, in respect of a licence held by a natural person on behalf of a partnership or corporation, that the scheme of the Act is to expose to scrutiny by the licensing authority, an association of that kind.
The nature of such an association is directly relevant to the decision whether an applicant for a licence is a person of good character, who is a fit and proper person to hold a licence. Section 52A of the Act provides:
52A.Matters to be taken into account in deciding whether to issue licence
(1)In deciding whether, under section 52(1)(c), an applicant is of good character and is a fit and proper person to hold a licence, the licensing officer must take into consideration -
(a)the reputation, honesty and integrity of -
(i)the applicant; and
(ii)where the licence is to be held on behalf of a partnership or body corporate, the partners of the partnership and the officers of the body corporate;
and
(b)the reputation, honesty and integrity of people with whom -
(i)the applicant associates; and
(ii)where the licence is to be held on behalf of a partnership or body corporate, the partners of the partnership and the officers of the body corporate associate.
(2)A licence can be issued only if the licensing officer is satisfied that to issue the licence to the applicant would not be contrary to the public interest.
So far as this case is concerned, a crowd control agent is a person who supplies the services of crowd controllers: s 34. The offence of which the appellant was convicted is defined by s 36:
36.Crowd control agents to be licensed
A person must not act as [a] crowd control agent except under the authority of a crowd control agent’s licence.
Penalty: a fine of $15 000.
During the period alleged in the prosecution notice, it was clearly established and found by the magistrate that the appellant acted as a crowd control agent by supplying the services of a crowd controller to The Cabin. He was licensed. His licence was held on behalf of the corporation Equanimity Investments Pty Ltd, trading as the Empyrean Group. The appellant was able to hold that licence on behalf of the company because he was at the relevant time, an officer of the company as defined. He was a director, but not an employee. There was no evidence that the appellant had ceased to be a director. His licence, held on behalf of the company, had therefore not terminated automatically by the operation of s 54(2).
It was a valid licence which authorised the supply of the services of crowd controllers. In my opinion, when his Honour, at one point in giving his reasons, said that the licence was not valid, he did not mean to imply that it had terminated, but he was expressing his conclusion that it could not validly be used to authorise the supply of the services of crowd controllers by the appellant acting on his own behalf, trading as Phoenix Crowd Control.
The question, as the prosecution was conducted in the Magistrates Court, was whether, when the appellant acted as a crowd control agent to supply the services of a crowd controller to The Cabin, he committed an offence against s 36, because upon the proper interpretation of that section, his act of supplying the services of a crowd controller was not performed 'under the authority' of his licence.

The appeal and my conclusion

The grounds of appeal are lengthy. Leave to advance them has not been granted. In programming the appeal to its hearing, Jenkins J ordered that the application for leave to appeal was to be heard at the same time as the appeal.
I need not set the grounds out in their entirety. They are directed to the proposition that his Honour the magistrate erred in holding that the act of the appellant was not performed under the authority of the licence. It is contended that the magistrate erred in not finding that Phoenix Crowd Control was associated with Equanimity Investments Pty Ltd because the appellant was a director of the company and acted as such in setting up Phoenix Crowd Control.
In my opinion, having regard to the evidence of the appellant to which I have referred, the proposition that the appellant was merely establishing Phoenix Crowd Control as a further business name or a new business name changed from the name Empyrean Group under which the company operated, cannot be made good. That was not the legal effect of what was done, having regard to the provisions of the Business Names Act and, as his Honour the magistrate observed, the appellant's evidence was simply inconsistent with that proposition.
The core proposition advanced by the appellant is that he acted under the authority of the licence because he held it in his name, albeit on behalf of the company, trading as the Empyrean Group. He continued to be an officer of the company and he was therefore authorised to act under the licence. In my opinion, these propositions are wrong.
The appellant refers to s 43 which, as has been seen, provides that an officer of a corporation may hold an agent's licence on behalf of the corporation, 'and any business under that licence may be transacted in the name of the [body corporate]' (my emphasis).
As I understand the proposition, it is that the word 'may' imports the exercise of a discretion and it follows, so the argument goes, that business under such a licence may be validly transacted in the name of the corporation, or it may be validly transacted in some other name or simply in the name of the natural person who is the licensee. The appellant refers to s 56(1) of the Interpretation Act 1984 (WA) which provides:
Where in a written law the word may is used in conferring a power, such word shall be interpreted to imply that the power so conferred may be exercised or not, at discretion.
In my opinion, while that is accepted, it does not follow that where a crowd control agent acts as such by supplying the services of a crowd controller, he may do so validly under the authority of a licence held on behalf of a corporation without acting in that capacity in the name of the corporation, but by acting in some other name, as in this case. In s 43(2), the word 'may' imports a discretion whether or not to transact the business of a crowd control agent in the name of the corporation, but if that discretion is exercised, the business must be transacted in the name of the corporation. That is the power which is conferred which, at discretion, may or may not be exercised.

There are many authorities which may be cited in support of that view of this legislation, perhaps commencing with Julius v Lord Bishop of Oxford [1880] 5 AC 214. In the High Court, reference may be made to the authority of cases like Ward v Williams (1955) 92 CLR 496; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 and Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194. In this jurisdiction, a useful authority is Channel 7 Perth Pty Ltd v S (A Company) [2007] WASCA 122; (2007) 34 WAR 325 per McLure JA, Pullin and Buss JJA agreeing at 333 ‑ 334 [19] ‑ [20].
Shortly put, the point is that under s 43(2), a licence holder has a discretion to exercise as to whether or not business by way of acting as a crowd control agent is to be transacted. But if that is to be done and the licence is held on behalf of a partnership or corporation, the business must be transacted in the name of the partnership or corporation if the person is to act as a crowd control agent under the authority of the licence. The word 'may ' imports the discretion to act, and if that discretion is exercised, the action must be in the name the corporation because the person holds the licence on behalf of that corporation and not in his or her own right.
That was the view of the magistrate and in my respectful opinion, his Honour was right when he reached that conclusion. None of the grounds of appeal may succeed. I refuse leave to appeal and dismiss the appeal.
The respondent has applied for costs of the appeal and they are agreed in the sum of $3,850. The appellant must pay the respondent's costs of the appeal fixed in that sum.