Lu v Commissioner for Fair Trading (No 2)

[2018] NSWCATAD 221

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Lu v Commissioner for Fair Trading (No 2) [2018] NSWCATAD 221
Hearing dates:	13, 14 and 17 August 2018
Date of orders:	19 September 2018
Decision date:	19 September 2018
Jurisdiction:	Administrative and Equal Opportunity Division
Before:	C Ludlow, Senior Member
Decision:	The decision under review is affirmed.
Catchwords:	ADMINISTRATIVE LAW – Tattooist’s licence – fit and proper person – public interest
Legislation Cited:	Administrative Decisions Review Act 1997 (NSW) Children and Young Persons (Care and Protection) Act 1998 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Tattoo Parlours Act 2012 (NSW) Tattoo Parlours Regulation 2013 (NSW)
Cases Cited:	Allen v Commissioner for Fair Trading [2015] NSWCATAD 273 Austin v Commissioner of Fair Trading & Commissioner of Police [2016] NSWCATAP 179 Australian Broadcasting Tribunal v Bond [1990] HCA 33 Certain Lloyd’s Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 Commissioner of Police v Toleafoa [1999] NSWADTAP 9. Constantin v Commissioner of Police, NSW Police Force (GD) [2013] NSWADTAP 16 Hughes and Vale Pty Ltd v New South Wales (No.2) [1955] HCA 28) Lu v Commissioner for Fair Trading [2018] NSW CATAD 24 McKinnon v Department of Treasury (2005) FCAFC 142 Smith v Commissioner of Police, NSW Police Force & NSW Fair Trading [2014] NSWCATAD 184
Category:	Principal judgment
Parties:	Yuhuai Lu (Applicant) Commissioner for Fair Trading (First Respondent) Commissioner of Police (Second Respondent)
Representation:	Counsel: Mr N Allan (Applicant) Mr M Kalyk (First and Second Respondents)   Solicitors: Kinny Legal Crown Solicitor’s Office
File Number(s):	2018/00096719
Publication restriction:	Pursuant to s 64(1) of the Civil and Administrative Tribunal Act 2013, the disclosure or publication of Exhibit C1 and any recording or transcript of the confidential hearing in these proceedings is prohibited except to the Second Respondent. Sections of these reasons which contain information related to Exhibit C1 and the confidential hearing are marked “Not for publication” and may not be disclosed to the public or the applicants.

REASONS FOR DECISION

Background

1. The applicant in these proceedings has applied for administrative review of the decision made by the first and second respondents on his application for a tattooist licence under the Tattoo Parlours Act 2012 (“the TP Act”). A tattooist licence authorises the licensee to perform body art tattooing procedures in accordance with the TP Act and the conditions of the licence.

2. The applicant had previously applied for and eventually been refused an application for an operator licence under the TP Act. He sought review of that decision but the decision was affirmed (Lu v Commissioner for Fair Trading [2018] NSW CATAD 24).

3. His application for a tattooist licence was refused after the Second Respondent made a security determination under s 19(1) of the TP Act. The Second Respondent determined that:

1. The applicant was not a fit and proper person to be granted the licence, because of his disregard for licensing requirements;

2. It would be contrary to the public interest for the applicant to be granted the licence, because of his disregard for licensing requirements.

4. The refusal was on the basis that an adverse security determination had been made by the Second Respondent and the Commissioner for Fair Trading must not grant a licence where an adverse security determination has been made by the Commissioner of Police about the applicant.

Issues for consideration

5. The First and Second Respondents submit that the decision to refuse the applicant a tattooist licence should be affirmed, on the two grounds identified in the security determination. In support of this they rely on the earlier Tribunal decision and portions of the transcript and evidence in those proceedings. A large part of that evidence relates to the applicant’s interactions with police and Fair Trading after he first applied for an operator’s licence after the TP Act commenced. The First and Second Respondents submit that his behaviour shows a disregard for the licensing scheme. In addition they rely on certain confidential criminal intelligence information. That information is subject to an order under s 64(1) of the Civil and Administrative Tribunal Act 2013.

6. The applicant submitted that the earlier Tribunal decision is not relevant because it concerned an operator licence and a tattooist licence is not subject to the same obligations as an operator licence.

7. In addition the applicant submitted that his conduct with regard to his application for an operator’s licence had been at the most careless, and he had also suffered from bad luck, ineptitude and possibly bad faith on the part of the First and Second Respondents.

8. The applicant objected to the adducing of evidence from the earlier proceedings on the grounds of lack of relevance, lack of sufficient notice and lack of procedural fairness.

9. The criminal intelligence information was tendered in a confidential session in the absence of the applicant and his legal representatives, as required by s 27(4)(b) of the TP Act.

The legislative framework

10. Section 6(1) of the TP Act provides that a person must not carry on a body art tattooing business (whether on the person’s own behalf or on behalf of another person) at any premises unless the person is authorised to do so by an operator licence. Sections 9 and 10 provide:

“9 Types of licences and authorisation conferred by licence

(1) The following kinds of licence may be granted and held under this Act:

(a) an operator licence,

(b) a tattooist licence.

(2) An operator licence authorises the licensee to carry on a body art tattooing business (whether on his or her own behalf or on behalf of another person) at the premises specified in the licence in accordance with this Act and the conditions of the licence.

(3) A tattooist licence authorises the licensee to perform body art tattooing procedures in accordance with this Act and the conditions of the licence.

(4) The authorisation conferred by a licence is subject to this Act and the regulations.

10 Licence conditions—general provisions

(1) A licence is subject to:

(a) such conditions as may be imposed by the Secretary under this Act (whether at the time the licence is granted or at any later time), and

(b) such conditions as are imposed by this Act or prescribed by the    regulations.

(2) Subject to subsection (4), the Secretary may impose, vary or revoke conditions on a licence for such reasons, and in such circumstances, as the Secretary considers appropriate or necessary.

(3) The Secretary may:

(a) impose a condition at the time the licence is granted by specifying it on the licence that is issued, and

(b) impose, vary or revoke conditions on a licence after it is granted by written notice served on the licensee.

(4) Nothing in this section authorises the Secretary:

(a) to impose a condition that is inconsistent with a condition imposed by this Act or the regulations, or

(b) to vary or revoke a condition imposed by this Act or the regulations.

(5) A licensee must comply with any conditions to which the licence is subject.

Maximum penalty (subsection (5)): 20 penalty units.”

11. Section 11 provides that an application for a licence is to be made only by an individual. Section 12 provides:

“12 Statement as to close associates of applicant for operator licence

(1) An application for an operator licence or for the renewal of an operator licence must be accompanied by a written statement in the approved form, made by the applicant, specifying:

(a) that the applicant has made all reasonable inquiries to ascertain the information required to complete the statement, and

(b) the following information about any close associates of the applicant:

(i) if the associate is an individual—the individual’s name and date of birth,

(ii) if the associate is a proprietary company—the name and ACN of the company and the names of its directors and shareholders,

(iii) if the associate is any other kind of corporation—the name of the corporation, its ACN or ARBN (if any) and the names of the directors or members of its governing body,

(iv) if the associate is a partnership—the trading name of the partnership and the names of the partners (including any silent partners),

(v) if the associate is a trust—the names of the trustee or trustees and, if a trustee is a proprietary company or other corporation, the information referred to in subparagraphs (ii) and (iii) concerning its management and shareholders.

(2) The regulations may provide for exceptions to this section.

(3) In this section:

ACN, ARBN and proprietary company have the same meanings as they have in the Corporations Act 2001 of the Commonwealth.”

12. Section 14 provides:

“14 Investigations, inquiries and referrals in relation to licence applications

(1) If the Secretary receives an application for a licence or for the renewal of a licence, the Secretary:

(a) may carry out such investigations and inquiries in relation to the application as the Secretary considers necessary for a proper consideration of the application, and

(b) is to refer any application that the Secretary considers to have been duly made (along with any supporting information) to the Commissioner for an investigation and determination as to any one or more of the following:

(i) whether the applicant is a fit and proper person,

(ia) whether a close associate of the applicant is a fit and proper person,

(ii) whether it would be contrary to the public interest for the licence to be granted or renewed.

(2) However, an application for the renewal of a licence is required to be referred to the Commissioner only if the application includes any changes relating to:

(a) the close associates of the licensee, or

(b) the licensed premises at which the licensee carries on a body art tattooing business.”

13. Sub-sections 16(1) and (2) provide:

“16 Decision of Secretary in relation to licence applications

(1) The Secretary may, after considering an application for a licence or for the renewal of a licence and the determination of the Commissioner under section 19 on the application, grant or renew the licence or refuse to grant or renew the licence.

(2) The Secretary may, in such circumstances as the Secretary considers appropriate, treat an application for a licence or for the renewal of a licence as having been withdrawn.”

14. Section 19(1) provides that if an application for a licence is referred to the Commissioner for investigation under s 14, the Commissioner is to inquire into and determine, and report to the Secretary on, any one or more of the following:

1. whether the applicant is a fit and proper person to be granted the licence,

2. whether a close associate of the applicant is a fit and proper person, and

3. whether it would be contrary to the public interest for the licence to be granted.

15. When it commenced, cl 29 of the Tattoo Parlours Regulation 2013 “the Regulation” provided:

“29   Transitional provisions in relation to pending applications for licences

(1) In this clause, the relevant day means the day on which Part 2 (Offences relating to unlicensed body art tattooing) of the Act commences.

(2) If an application for an operator licence has been made (but not determined by the Director-General) before the relevant day in relation to the carrying on of a body art tattooing business at premises, sections 6 and 8 of the Act are taken not to apply in relation to the carrying on of that business at those premises until:

(a) if the business for which the licence is sought was not an existing business that was being carried on at the premises when the application was made—the day on which the Director-General notifies the applicant that the licence has been granted or refused or the application has been treated as being withdrawn (as the case requires), or

(b) if the business for which the licence is sought was an existing business that was being carried on at the premises when the application was made:

(i) in the case where the Director-General grants the licence—the day on which the Director-General notifies the applicant that the licence has been granted, or

(ii) in the case where the Director-General refuses to grant the licence or treats the application as having been withdrawn—7 days after the day on which the Director-General notifies the applicant that the licence has been refused or the application has been treated as being withdrawn (as the case requires).

(3) If an application for a tattooist licence has been made (but not determined by the Director-General) before the relevant day, sections 7 and 8 are taken not to apply in relation to the applicant (or the employment of the applicant) until the day on which the Director-General notifies the applicant that the licence has been granted or refused or the application has been treated as being withdrawn (as the case requires).”

The Tribunal’s jurisdiction

16. As determined in previous decisions (Austin v Commissioner of Fair Trading & Commissioner of Police [2016] NSWCATAP 179; Smith v Commissioner of Police, NSW Police Force & NSW Fair Trading [2014] NSWCATAD 184) this Tribunal may grant a licence despite the existence of an adverse security determination made by the Commissioner of Police. The Commissioner of Police assesses whether an applicant is fit and proper and where the public interest lies in respect of a licence. It is the decision of the Commissioner for Fair Trading that is under review, however, and not the Commissioner of Police's security determination (see s 8(2) of the Administrative Decisions Review Act 1997 (“ADR Act”).

17. The Tribunal is required to take the adverse security determination into account as a relevant consideration to which weight must be given. It is not “a starting point or prima facie position” which the applicant must displace (Smith at [26]). The Tribunal is not confined to the grounds relied upon by the Commissioner in making the adverse security determination. The Tribunal may make its decision on any other lawful, discretionary basis. This may include criminal intelligence reports or other criminal information.

18. In determining an application for review of a decision under the TP Act, the Tribunal is to decide what the correct and preferable decision is, having regard to the material then before it. For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision (s 63(1) and (2) ADR Act. )

19. Nevertheless it is relevant to note the matters which may result in an adverse determination of an applicant for a licence. They are:

1. that the applicant is not a fit and proper person to be granted a licence,

2. that a close associate of the applicant is not a fit and proper person, or

3. that it would be contrary to the public interest for the applicant to be granted a licence.

20. In this case the security determination found that the applicant had shown a disregard for the licensing legislation over a long period.

21. The security determination referred to language used in emails from the applicant and suggested that someone else wrote the emails for him. I do not see the relevance of this to whether an applicant is fit and proper. The determination also relied on findings by Senior Member Ransome in the earlier Tribunal proceedings, particularly that the applicant tailored his evidence to place himself in a favourable light and that she could not be satisfied that he would adhere to all the requirements of the licensing scheme.

22. As to the public interest, the determination stated that the applicant had performed body art tattooing procedures in breach of the legislation and failed to comply with public health regulations. The determination also considered certain confidential criminal intelligence which is dealt with elsewhere in these reasons.

Fit and proper

23. Whether a person is fit and proper has been said to relate to honesty, knowledge and ability, and is to be judged by the nature of the activities that the person seeks to undertake (Hughes and Vale Pty Ltd v New South Wales (No.2) [1955] HCA 28). In Australian Broadcasting Tribunal v Bond [1990] HCA 33 it was explained by Chief Justice Mason at [63]:

“The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration.”

24. In the same case, Toohey and Gaudron JJ said at [36]:

“The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.”

25. The interpretation of “fit and proper” in this context will be influenced by the general purpose of the legislation which broadly, is to rid the industry of any criminal or otherwise undesirable element and the avoidance of improper conduct (Austin at [23-25]).

26. The TP Act does not specify what makes a person fit and proper to hold an operator’s licence or a tattooist’s licence. There are no technical knowledge or skill requirements imposed for licence qualification. The activities of a tattooist are, however, to some extent, regulated by the Public Health Act 1991 (NSW) and by Division 3 of Pt 4 of the Public Health Regulation 2012 (NSW).

27. As noted in Smith, the second reading speeches on the introduction of the Bill to Parliament are of relevance in understanding the mischief sought to be addressed by this legislation. It is appropriate that they be referred to in order to assist to identify the criteria that are relevant to fitness and propriety in this context: see, for example, Certain Lloyd’s Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 per Crennan and Bell JJ.

28. In his second reading speech on the introduction of the Bill to Parliament, on 3 May 2012, the Minister for Fair Trading noted that the Act was introduced in response to gang crime in NSW and that it aimed to break the stranglehold that outlaw motorcycle gangs have over the tattoo industry. The Minister stated:

“When tattoo parlours are no longer controlled by bikies they will not be so closely associated with serious acts of violence, such as shootings and fire-bombings. Bikies will no longer feel that they own the industry and that they have the right to stand over, and extort, owners of tattoo businesses who are unaffiliated with outlaw motorcycle gangs. Nor will tattoo parlours be able to provide a means for organised criminals to launder the proceeds of crime. I am advised that currently some parlours even advertise themselves as cash-only businesses. This is highly suspicious, to say the least.

This bill makes good on the Premier's announcement to get bikies out of tattoo parlours. The bill introduces a licensing and regulatory regime for tattoo parlours and tattooists. The bill provides for the Commissioner of Police to conduct investigations into licence applicants and licensees to ensure that only fit and proper persons are granted and able to hold such licences. The bill makes it compulsory for any person currently operating, or wanting to operate a business that offers body art tattooing services, to obtain a licence ...

The bill creates two classes of licence: an operator licence and a tattooist licence. Applications for licences will be made to the Commissioner for Fair Trading. An operator licence will authorise the licensee to carry on a body art tattooing business at a specific premises. A tattooist licence will authorise the licensee to perform body art tattooing procedures. Sole operators will require only an operator licence. The bill includes a regulation-making power which will allow for exemptions from these requirements, for example, exempting body art tattooing where it is being undertaken for a body art or trade show exhibition. Only an individual can apply for a licence, even when the individual is applying on behalf of an organisation. Offences and penalties under part 5A of the Crimes Act 1900 will apply in relation to false or misleading applications. A person who is under 18 years, or who is a controlled member of a declared organisation, may not apply for a licence. Controlled members of declared organisations are those persons who are subject to interim control orders or control orders under the Crimes (Criminal Organisations Control) Act 2012. An applicant must also be an Australian citizen or resident.

…

The bill provides a definition of "close associate". Defining close associates is important to ensure that all persons with a relevant interest in a body art tattooing business are identified. A close associate is someone who will hold a financial interest, or can exercise any power in the applicant's business, and who by virtue of that power will be able to exercise a significant influence over the business. "Close associate" also will include a person who has any relevant position in the business that will be carried on under the authority of the licence. In some cases bikie gangs, who have effective control over a tattoo parlour, have, on paper, no legally enforceable interest in the business. The bill makes it clear that a close associate is someone who can, in fact, direct the business, or receive a financial benefit from it whether or not it is legally enforceable. Applicants for both an operator licence and a tattooist licence must also pay a fee.

…

The bill provides that the Commissioner of Police may consider criminal intelligence or other criminal information in relation to an applicant or licensee or in relation to a close associate of an applicant or licensee. Criminal information and intelligence can include information relevant to the business or procedures to be carried out under the licence, or that gives an indication that some improper conduct could occur if the applicant were granted a licence, or a licensee were permitted to retain a licence. However, it should be made clear that some people currently in the tattoo industry may regularly associate with bikie members unwillingly. For example, they may be forced to pay them protection money. The Commissioner of Police will distinguish between those who have willingly assisted and associated with criminals on the one hand and, on the other, people who are essentially victims of extortion.

…

One of the Government's aims in introducing this legislation is to ensure that tattoo parlours cannot be used to launder the proceeds of crime. To that end, the bill makes it a condition of an operator licence that the licensee must make certain business financial records available for inspection by an authorised officer at a reasonable time. Licensees will also be required to report on any change of licence particulars within 14 business days of the change occurring. Particulars could include change of the licensees' residential address, or a change in close associates. The regulations may also make provision for other relevant particulars. To ensure that a business cannot employ unlicensed tattooists in a body art tattoo business, and that all employees are subject to proper scrutiny, it will be a condition of an operator licence that the operator informs the Commissioner of Fair Trading within 20 business days of any change in staff member employment at the licensed premises. A change in staff member employment includes a new staff member commencing employment, or a staff member ceasing employment at the licensed premises. The definition of "staff member" is not limited to licensed tattooists, but to any staff member employed at the licensed premises. Without this definition, there is a risk that, in an attempt to avoid scrutiny by the regulators, the real operator of the premises may be employed there in another capacity, for example, as a bookkeeper or receptionist.”

29. While the second reading speech focused on the involvement of outlaw motorcycle gangs in the tattoo industry, it is clear from the Act that the broader intention is to rid the industry of any criminal or otherwise undesirable element and the avoidance of improper conduct. As to the distinction between tattooists and operators, it is clear that employees, including but not limited to tattooists, were to be scrutinised as well as operators. Tattooists however were the only employees who were required to be licensed.

30. It has been held that unfitness can be indicated by “criminal associations, habitual recidivism, formal or informal links with Outlaw Motorcycle Gangs (OMCGs), failure to implement proper tattooing practices and general disregard for the law” (Allen v Commissioner for Fair Trading [2015] NSWCATAD 273 at [49])

31. As noted in Austin, the character test for a tattooist will not be the same as a legal practitioner. However, in that case the Tribunal considered that Mr Austin’s criminal history stood in the way of him holding a tattooist’s licence in the absence of evidence of rehabilitation or evidence that would give the Tribunal confidence that he would conduct himself as a tattooist safely and honestly. I agree that factors like respect for the law, past criminal conduct, association with criminals, competence and compliance with procedures are relevant to whether a person meets the fitness and propriety test.

The public interest

32. The public interest is a broad concept and allows for issues beyond character to be considered, such as safety and public confidence in the industry (Constantin v Commissioner of Police, NSW Police Force (GD) [2013] NSWADTAP 16 at [33]; Commissioner of Police v Toleafoa [1999] NSWADTAP 9 at [25]).

33. As stated in McKinnon v Department of Treasury (2005) FCAFC 142 by Tamberlin J at [12]

“The expression “the public interest” is often used in the sense of a consideration to be balanced against private interests or in contradistinction to the notion of individual interest… The public interest is not one homogenous undivided concept. It will often be multifaceted and the decision-maker will have to consider and evaluate the relative weight of these facets before reaching a final conclusion as to where the public interest resides.”

34. In the context of the security industry, an applicant’s personal interest in retaining his licence cannot outweigh the public interest in having full confidence in the professionalism of people in that industry. (Smith and the cases cited there at [46]).

Chronology

35. The following facts were not in dispute.

36. In March 2013 the applicant entered into a contract to purchase his business. On 12 September 2013 he lodged an application for an operator licence. Subsequently he operated a tattooing business continuously.

37. On 1 October 2013 the TP Act commenced. On 12 August 2015 Fair Trading sent the applicant a final notice regarding his application. On 24 September 2015 the application was treated as withdrawn by Fair Trading. In June 2016 the applicant contacted Fair Trading and was told that Fair Trading had sent him a final notice on 12 August 2015. On or about 1 July 2016 the applicant lodged a second licence application with Fair Trading. On 30 December 2016 a 72 hour closure order was served on the applicant by the police. After the 72 hours expired the applicant recommenced trading. On 3 February 2017 his second licence application was refused.

38. On 2 March 2017 the applicant sought review of the refusal in this Tribunal. Those proceedings were determined by Senior Member Ransome on 25 January 2018 (Lu v Commissioner for Fair Trading [2018] NSWCATAD 24) and the original decision was affirmed.

The earlier proceedings

39. The earlier Tribunal decision made a number of adverse findings concerning the applicant. The parties disagreed on what if any relevance those findings had to these proceedings.

40. A number of findings were made in those proceedings concerning the applicant’s credit including:

1. Portions of his evidence were implausible and disingenuous [87], [94];

2. The applicant had shown a disregard for the laws concerning tattoo parlours over a sustained period and continued to do so despite being informed by police that he could not operate. [89], [101]; and

3. The applicant was prepared to give untruthful evidence [90], [102].

41. I have determined that the earlier findings are relevant but not determinative. My reasons for doing so are:

1. It was open to the applicant in these proceedings to provide fresh evidence and/or interpretations relating to the factual matters which are relevant to this application.

2. It was also open to the applicant to adduce evidence as to what he has done or intends to do since that finding was made.

3. Senior Member Ransome’s findings about the applicant’s credibility were made in separate proceedings based on her own observations.

Issues for consideration

42. I am required to determine what is the correct and preferable decision concerning the applicant’s request for a tattooist’s licence based on the law and the material before me. His fitness and propriety to hold such a licence is challenged by the respondents. In addition they contend it would be against the public interest for him to be issued such a licence. I will deal with each of these criteria separately.

Is the applicant a fit and proper person to hold a tattooist’s licence?

43. A number of grounds were relied upon by the respondents. These were:

1. The applicant operated a tattoo parlour without a licence for several years and body art tattooing was performed in the parlour which he operated without a licence for a number of years.

2. The applicant purchased his tattoo parlour business from a known member of an OMCG. The contract between the applicant and the vendor did not represent the entire contract and he maintained an association with that person.

3. The applicant lied to and misled police on a number of occasions.

4. The applicant breached health requirements.

5. [NOT FOR PUBLICATION]

6. [NOT FOR PUBLICATION]

Operating a tattoo parlour without a licence

44. The applicant gave evidence that he emigrated to Australia in 2006 from mainland China. While he does speak and understand English to an extent, he gave most of his evidence through a Mandarin interpreter. He was married in 2016 and has a child. He worked as a tattooist from 2008. The evidence demonstrated that he is clearly artistically talented, has won several awards and has a following on social media. In early 2013 he took the opportunity to purchase a tattooing business in the Haymarket area of Sydney.

45. Senior Constable Prowse gave evidence that at around the time of the commencement of the TP Act, he was one of the officers tasked to visit tattoo parlours and inform tattooists and operators of their obligations and responsibilities under the new legislation. He said that this included:

1. The tattooists’ obligations to record details of their tattoo jobs;

2. The requirement for tattooists licences;

3. The transitional arrangements;

4. Health and safety requirements;

5. Asking operators if they had links with motorcycle gangs and if the parlours were used as clubhouses.

46. A COPS entry recorded the visit to the parlour where the applicant worked on 25 July 2013 at which time the applicant was listed as the manager. The COPS record states:

“All tattooists were spoken to regarding the new licensing laws for artists and the business. All artists stated that they were aware of the new laws and were in the process of obtaining the correct licences.”

47. Constable Prowse said the applicant was present during the visit with a couple of other people. He said that he told them that the new legislation was coming in October 2013 and that after that they could not trade without a licence. He agreed that he could not recall verbatim what he said on the occasion but he remembered the topics that he addressed. He agreed that he did not speak to the tattooists (including the applicant) about the operators’ obligations.

48. Under transitional provisions in the legislation, the applicant was permitted to operate a tattoo parlour pending a decision being made on his application.

49. The applicant subsequently lodged an application for an operator’s licence. In his evidence he said that he used his aunt’s address which was at Ashfield as the contact address on his application as his mail was already being sent there. He also provided his email address. He said that he did not hear anything about his application in 2013 or 2014, and did not receive any mail although he checked the mail for him at his aunt’s address at least once a month. He said that the mailbox at his aunt’s house was very small and there were tenants in the house. He said his aunt had told the tenants to keep mail which was not addressed to them and leave it in a bucket on the front porch, and that was where he usually collected his mail from.

50. He said that in June 2015 he contacted the Department and was told his application was being processed. He did not receive any other correspondence or contact about his application in 2015. On 27 June 2016 he said that he contacted the Department again and was told that the Department had sent him an email on 12 August 2015. He said that he could not find that email and asked for it to be sent again. He received a “Final notice” dated 12 August 2015 which stated that if he failed to provide the required information within 14 days his application may be refused. In fact his application had been deemed withdrawn on 24 September 2015, some nine months earlier.

51. He said that after discussing his situation with someone at the Department over the phone, he was advised to put in a fresh application. He said that he did this the same day. It was not in dispute that the Department had returned a cheque for his earlier licence fee by cheque with the deemed withdrawal correspondence and the cheque had not been presented.

52. Peter Flematti, a Licensing Advisor in the Business Licensing Unit of the Department of Fair Trading, gave evidence. He said that licensing applications were recorded on a database called Government Licensing System or GLS. When persons made enquiries by email or telephone to Fair Trading about the progress of their licence, the office could access the information on the GLS to see what stage the application had reached. In the case of tattooist and operator licences, this information included whether the application had been referred to police and when, and whether information from the applicant was outstanding.

53. Evidence was tendered to show that the applicant’s first licence application was registered on the GLS. Mr Flematti performed some functions relating to the licence and so did a Ms Chand. On 24 September 2013 Ms Chand sent a letter seeking further information to the applicant by ordinary post to the address on the application, which was in Ashfield. Outward mail was placed in a container and collected for mailing twice a day at the time.

54. No answer was received from the applicant. Another letter in the form of a final notice was sent by ordinary post on 12 August 2015 to the same address, and was also emailed to the applicant’s email address. Mr Flematti said he had searched the inbox, junk folder and deleted files folder in the Business Licensing’s email address and had found no indication that the email sent on 12 August 2015 had not been received or had “bounced back”. On 24 September 2015 he recorded in the GLS that the application was treated as withdrawn as no response had been received. A letter to that effect was sent to the applicant’s postal address and email address on the same day.

55. Fair Trading had no record of contact by the applicant in June 2015 or on 27 June 2016 as the applicant had claimed. Mr Flematti said that because the first file had been closed by then, there was no reason to log the call. The next file was opened on 4 July 2016 following receipt of the second application.

56. Mr Flematti agreed that the evidence from the GLS showed that the entry in the GLS recording that an email was sent to the applicant on 12 August 2015 was sent at 12.20, 20 minutes before the email itself was sent. It is not clear what this signifies apart from the fact that the email was sent after the notation in the system. He said there was no system which alerted the Department to the fact that no responses had been received to correspondence about licences.

57. Mr Flematti said that when calls are received at Fair Trading about a licence inquiry, they are directed to Business Licensing or the Department’s general customer service lines. Callers inquiring about the status of their licence application are transferred to Business Licensing. If a person were to ask a Business Licensing staff member about the status of their licence application, the officer would access GLS. Staff in the customer service area do not have access to GLS. There is no conclusive record of every call made to Fair Trading, however. If a person had made that inquiry in early 2015, the screen would have shown that further information was awaited.

58. Constable O’Donnell provided evidence relating to his interactions with the applicant concerning his tattoo parlour business.

59. On 9 November 2016 he attended the tattoo parlour with a Constable Anderton and approached the applicant who he said confirmed he was the business owner. He observed tattooing procedures taking place. He asked to see the applicant’s licence and said the applicant showed him an application for a tattoo parlour operator licence and a receipt showing he had paid the application fee. Constable O’Donnell said that the applicant said that he was waiting for his licence to be sent to him.

60. The applicant provided the licences of the three working tattooists. He said that he asked the applicant “Can I see your Tattooing Procedures Log?” and the applicant asked “What is that?” he repeated it and the applicant said “I don’t have one”. He asked the applicant if he kept records for each tattoo procedure performed and the applicant said “No”.

61. The applicant contradicted this version of events. He denied that he said he didn’t have a log and denied that Constable O’Donnell asked him about cash receipts. He said that when Constable O’Donnell asked if he kept records, he told him it was in the computer and Constable O’Donnell said “Don’t worry about it.” He said the computer was a laptop and it was sitting inside the reception desk at the time.

62. Constable O’Donnell denied this. He said that the applicant did not tell him he had records on a laptop and he did not point to the laptop. He denied telling the applicant not to worry about it or words to that effect.

63. Constable O’Donnell said he made inquiries on 10 November 2016 with the Security Licensing Enforcement Directorate (SLED) of the NSW Police about the applicant’s licence. He received information to the effect that the applicant was not licensed and he should contact a Ms De Lorenzo at Fair Trading. He did so and was told that the licence was still pending and yet to be approved. His application was withdrawn on 25 September 2015, a new application was submitted on 27 June 2016 but this did not entitle him to operate in the interim.

64. Constable O’Donnell was cross-examined about the last sentence in the email from the officer at the Directorate, which was: “Looking forward to reading about the event.” He denied that he and the other officer were having a laugh at the applicant’s expense because he was going to charge him for breach of the licencing laws.

47. He attended the tattoo parlour again on 17 November and after warning the applicant, asked him some questions. The answers were recorded in his notebook and signed by the applicant.

48. According to the COPS entry which records the notebook entries, the applicant was asked “Does this tattoo parlour operate with a tattoo operators’ licence” and the applicant replied “OK in the law if we apply before the law comes on, we can continue cause we running the business before the law change.” He showed Constable O’Donnell his licence application. The COPS entry was created a week after the event, however Constable O’Donnell said he relied on his notebook.

49. Constable O’Donnell recorded that he said to the applicant:

“I have conducted enquiries and you do not hold a tattoo parlour operator licence. You submitted your original application before the 1st of October 2013 which allowed you to trade in the interim while your application was pending. That application was withdrawn by Fair Trading. Your new application which you submitted in June this year does not allow you to operate the tattoo parlour, you need a tattoo parlour operator licence to trade. If you trade without an operator licence it is an offence and you may be fined.”

68. The applicant’s version of these events was that Constable O’Donnell interviewed him on this occasion and asked him to sign his notebook but neither officer said anything to him about not being able to trade without a licence or breaking the law by doing so, and did not say that his second application being pending did not allow him to operate.

69. Constable O’Donnell, under cross-examination, said that at that point he had suspicions that offences had been committed but he still needed to find out whether the applicant’s application was valid. He denied that he and the officer from SLED had already formed the view that the business would be closed down. He said it was not SLED’s decision whether the licence would be issued or not. He said that he told the applicant that he could not operate under the transitional provisions. He agreed that he took no action on the other wrong doing. However there was evidence that he had advice that the breaches would not apply to the applicant as the applicant did not have a licence.

70. He received a Certificate of Evidence from the delegate of the Commissioner of Fair Trading on 22 November 2016 confirming that the applicant did not hold an operator licence or a tattooist licence and that the parlour was not a licensed premises.

71. On 30 December 2016 he attended the applicant’s tattoo parlour and issued an interim closure order pursuant to s 28 of the TP Act. He said that he told the applicant:

“You do not have a tattoo parlour operator licence and cannot operate the business until your application is approved. The application you have submitted does not allow you to trade. The interim closure order is for 72 hours and is enforceable. You still cannot operate after the 72 hour period until you have an operator licence. You will need to contact NSW Fair Trading in relation to your application.”

72. The applicant’s versions of these encounters were different. In a statement stated 9 May 2017, which was tendered in these proceedings, he said that he discussed his two applications with Constable O’Donnell and that Constable O’Donnell said that he would do some research.

73. When Constable O’Donnell served the closure order the applicant’s wife was present. The applicant said he asked what the order meant and that Constable O’Donnell did not answer. He said that his wife asked: “What happens after the 72 hours are up?” He said Constable O’Donnell did not answer their questions, did not tell him that he could not trade and only told him to refer his questions to Fair Trading.

74. He said that he closed the business for 72 hours then commenced trading again. He said that his wife was in contact with Fair Trading by email. Emails between her and Mr Flematti in late 2016 were in evidence where the applicant’s wife was seeking information.

75. The applicant said that in January 2017 police came into the shop and he denied to them that tattooing was taking place and told them that the person who was conducting tattooing in their presence was an apprentice practising on his friend. He later admitted this was untrue.

76. Under cross-examination the applicant maintained that he did not receive any correspondence from Fair Trading before the email dated 12 August 2016 and did not knowingly operate without a licence. He said that Constable O’Donnell was either lying or mistaken concerning his claim to have told the applicant that he could not operate. He claimed that he kept running the business because he didn’t get a letter rejecting his application and because Constable O’Donnell did not tell him that he must close his business. However, in fact the applicant continued to run the business after he knew that his first application was rejected, which casts doubt on his claim.

77. At one point the applicant said that he had called Fair Trading after Constable O’Donnell’s first visit, then said he could not remember if he had called or not. He was taken to a portion of the transcript from the earlier proceedings where he had said through an interpreter:

“I did not specifically ask the fair department of – I didn’t specifically ask the Fair Trading after 72 hours whether I can still open the – the business can be open or not. It’s because I – I had firm belief that I was able to make – to carry on with the business.”

78. The applicant said that he would not have taken the risk of trading if a police officer had told him not to. When asked if it was his evidence that he was under no doubt that he could trade after the 72 hour closure order had expired, he said “Yes.” He said he believed he was under the transitional arrangement. He said he would not make a similar mistake again.

79. The applicant first applied for his licence during the transitional period provided by the Regulation. Because his was an existing business, under cl 29 of the Regulation he was permitted to operate until 7 days after the day on which he was notified that the application had been treated as being withdrawn. This happened on 24 September 2015. Therefore the period during which he operated unlawfully was from 2 October 2015 until 2 February 2017 when his licence was refused.

80. The applicant submits that he was misled by the police and by Fair Trading and that his legal position was not explained to him.

81. It is true that there was a very long period between the applicant’s application for a licence and action taken by Fair Trading to treat the application as withdrawn.

82. I am satisfied that Fair Trading did send the correspondence recorded in the GLS to the applicant’s Ashfield address by post and in August 2015 to the applicant’s email address. On the evidence I am unable to find that the applicant received the correspondence or single email.

83. I am not satisfied, however, that he was simply told that the application was “being processed” when he contacted Fair Trading in June 2015 and this was why he did nothing about his licence for a further year. The evidence was clear that such a call would have been referred to Business Licensing and if he had asked about the status of his licence application, the officer would have accessed GLS to provide that information and told him that he had not provided the necessary information and requests had been sent to him to do so. While language difficulties may have contributed to the delay, they do not explain it. The applicant was working and well known in the industry. He had at least three tattooists working in his business in November 2016, all of whom had licences. He could not have been as ignorant of the legislation and its requirements as he claims.

84. For the period from October 2015 to February 2017 he operated without a licence or authority under the transitional provisions. In or around late June 2016 he was told that his licence had been deemed withdrawn. He then put in a second licence application. I believe that the applicant took a position of wilful blindness towards his legal situation and continued to trade without taking any action to assure himself that he could lawfully do so. The applicant’s evidence on his state of knowledge about the lawfulness or otherwise of his business was mercurial. At one point he stated that he was uncertain as to whether he could trade; later he said that he believed it was “OK”; he also gave evidence that after the police came he had some doubts, but thought he could still operate.

85. I prefer the evidence of Constable O’Donnell to that of the applicant with regard to the visits by police to the applicant’s business during 2016. I am not satisfied that there was any reason for Constable O’Donnell to lie about those interactions, or attempt to work with SLED to trick the applicant or have a joke at his expense, as the applicant claimed. The applicant could not have been in doubt that he was failing to comply with the law.

Association with a known member of an OMCG

86. A COPS entry dated 22 February 2016 recorded that the applicant attended Day Street Police Station on that day and stated that three men whom he did not know had entered his business on that date and asked to speak to him. One of the unknown men had told the applicant “You owe me the rent” and when the applicant said “I do not owe any rent, how much do you think I owe” the man had said “$140,000”. The male said he would return the next day to collect the money.

87. According to the COPS record the applicant told police that he suspected the men were acting on behalf of the person from whom he had purchased the tattoo parlour business, who was referred to as Mr Edmund Doueihi. Mr Doueihi was named as the vendor on the contract of sale. The applicant said he had purchased the business for $100,000 but the vendor had proposed that the applicant should also pay him $2000 a week. The COPS report records that the applicant told police he agreed to this but then later stopped paying the money. The applicant also gave evidence to the same effect in the earlier proceedings, except that he said that he never paid the additional $2000 a week and had refused to do so. There is evidence that Mr Doueihi was a member of the Hells Angel OMCG and Mr Lu knew this.

88. In his statement in these proceedings the applicant says:

“I was not ever affiliated with groups or gangs.”

89. The applicant’s failure to complete the close associate portion of the application form was one of the reasons his application was not processed by Fair Trading.

90. The respondents submit that if Mr Douehei was receiving payments from the applicant two years after the purchase, he should have been declared as a close associate. The applicant conceded that the contract was not correct, for example it was dated two years before the transaction took place. He blamed his lawyer.

91. It is more probable than not, on this evidence, that the applicant suspected that Mr Douehi was associated with the Hells Angels and that he had some, if limited, contact with him after the sale. However I am not satisfied that he had any criminal association with him.

Lying to and misleading police

92. Constable O’Donnell said that on 9 November 2016 when he asked the applicant for identification, he noted that the applicant had a large number of 50 dollar notes in his wallet. He commented on this and said that the applicant told him that he won it on “the pokies” in the hotel downstairs.

93. Later Constable O’Donnell went to the Crystal Palace Hotel which was downstairs and asked to see the hotel records for cash paid out for gaming machine winnings for that day and did not see any significant cash payments.

94. It was put to the applicant in cross-examination that he had obtained that money from tattooing work. He disagreed. He said that he won it on multiple machines. He denied that this was a claim he had made because he knew that the machines did not record wins of smaller amounts and no one would be able to prove otherwise.

95. He agreed that police came to the parlour in January 2017 and that he told them that no one was actually tattooing at present apart from the apprentice who was practising on his friend. He agreed that this statement was false, but denied that he knew at that time that he could not operate.

96. It is more probable than not, in my view, that the cash which Constable O’Donnell saw was proceeds from the business. It is clear that the applicant was operating a tattooing business at the time and the account of winning the money on the poker machines is improbable.

97. I am also satisfied that the account which the applicant gave of his conversations with Constable O’Donnell is far from accurate. His version of events was that he was relying on the police to make clear to him what he should do, however, he also lied to them and did not follow their advice.

Public health regulations

98. The applicant admitted that in November 2016 the tattooists were not wearing the gowns that they were supposed to wear for health reasons. However he said that the studio was inspected and passed by the City of Sydney Council and there was never a health-related incident, and he would ensure in the future that health regulations were complied with.

Confidential criminal intelligence

99. [NOT FOR PUBLICATION]

100. [NOT FOR PUBLICATION]

101. [NOT FOR PUBLICATION]

102. [NOT FOR PUBLICATION]

Conclusions

103. I am required to determine what is the correct and preferable decision based on the material before me and the relevant law. I have outlined the relevant factual findings and the legal issues above.

104. The applicant submitted that whether he was a fit and proper person to hold a tattooist’s licence should be determined with regard to the nature of the role which, he submitted, had lesser obligations than those of an operator. It is true that there must be a difference between the obligations of an operator and those of a tattooist. The tattooist is not responsible for the conduct of other staff, does not manage the operation and does not have business responsibilities. However, the Act is concerned with whether a tattooist’s background or character could lead to, or facilitate the involvement of criminal organisations or interests in the tattoo parlour industry.

105. The applicant submitted that in operating his tattoo parlour business without a licence, he did not intend, and there was no logical reason to find that he intended, to deceive or defraud anyone. He did not receive the correspondence from Fair Trading and remained in limbo for 2 years as a result. Fair Trading did not diligently follow up his failure to respond as it should have. When police visited he did not avoid them.

106. When he became dubious about his licence he contacted Fair Trading on 27 June 2016 but this call was not recorded as there was no open file on which to record it.

107. He submitted that the Tribunal should not find that he received the letter from Fair Trading sent on 12 August 2015 because the date on the letter was two weeks after the date in the GLS. The fact that he promptly put in an application when he found it had been deemed withdrawn suggests that he wanted to comply with the law. The Tribunal should infer that because Ms Chand was not called as a witness her evidence would not have assisted the respondents.

108. The respondents submitted that the applicant’s lack of honesty and credibility was exemplified by instances of his recklessness with the truth and reliance on blaming others to explain his circumstances. As an operator he failed to keep proper records, he was evasive with police and admitted to lying on one occasion, he did not reveal his association with Doueihi and conceded he did not disclose one of his employees on his application form for “visa reasons”. The contract for sale of the business was backdated and did not show the true purchase price or ongoing payments.

109. The fact that he told police that he suspected Mr Doueihi was associated with a motorcycle gang shows that he was aware of the significance of this fact and was not as ignorant as he claimed about the licensing scheme.

110. The applicant submitted that there was a public interest in allowing him to practice his art as it contributed to the diversity of cultural expression. He is a recognised tattoo artist and has had to turn away a number of clients while he remains unlicensed.

111. The applicant submitted that he had been poorly treated by the respondents, who had taken 12 months to process his application. He had been careless about the licensing regime but would be more careful in future because of the difficulties he had experienced in attempting to obtain a licence.

112. The respondents submitted that the applicant’s skill as a tattooist was not relevant to the public interest and the legislation places the public interest over private interests.

113. The applicant has committed conduct which makes him unsuitable to be licenced as a tattooist under the current legislative scheme. He has lied to police, he operated a tattooing business with a wilful disregard for the licensing requirements which applied, and

114. [NOT FOR PUBLICATION]

115. I cannot assume that such conduct will not occur in the future in a business where the applicant works if he is granted a licence. The applicant’s lack of credibility and attribution of blame to others did not give me confidence that he would commit to behaving differently in future. It may be that at some point in the future he can demonstrate the necessary respect and care that the licensing scheme requires.

116. As to the public interest, the public must have confidence that a licensed tattooist will be honest and comply with the law and these factors outweigh the applicant’s skill and artistry.

Orders

1. The decision under review is affirmed.

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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: 19 September 2018