Marksman Training Systems Pty Ltd v The Registrar of Firearms (No 2) - [2015] SADC 5

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
MARKSMAN TRAINING SYSTEMS PTY LTD v THE REGISTRAR OF FIREARMS (No 2)
[2015] SADC 5
Judgment of His Honour Judge Tilmouth
22 January 2015
FIRE, EXPLOSIVES AND FIREARMS - FIREARMS - LICENCES AND RELATED MATTERS - LICENCES - ISSUE OF AND GENERALLY
Whether the appellant is a fit and proper person to retain licences under the Firearms Act, if it is in public interest for it to retain its firearms licence and whether it is open or appropriate to make findings against a third party, considered and discussed.
Held: It is appropriate to reinstate the licences subject to conditions. Appeals allowed.
District Court Act 1991 (SA) s 42E(3), s 42F(c); Firearms Act 1977 (SA) s 5(10), s 5(11), s 5(12), s 5(13), s 11(4)(a), s 13(5), s 15D(1), s 15D(2)(c), s 17(4) and (4a), s 18, s 20, s 20(1a)(a), s 25, s 25(1), s 30, s 31, s 32, s 36A; Marksman Training Systems Pty Ltd v The Registrar of Firearms [2014] SADC 150; Firearms Regulations 2008 (SA) reg 15, reg 16, reg 22(1)(d), reg 22(1)(j)(k), reg 61; He Kaw Teh v The Queen (1985) 157 CLR 523; R v Sault Ste. Marie [1978] 2 SCR 1299; Norcock v Bowey [1966] SASR 250; Mayer v Marchant (1973) 5 SASR 567; Allen v Chadwick (2014) 120 SASR 350; Jaworski v Police [2009] SASC 284; Registrar of Firearms v Gitsham (2002) 84 SASR 72; Golding v Police [2007] SASC 159; Police v Losapio [2007] SASC 112; Davies v Registrar of Firearms [2005] SASC 149; R v Cluse (2014) 120 SASR 268; Teachers Registration Board of South Australia v Edwards (2013) 117 SASR 246; Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127; Albarran v Companies Auditors and Liquidators Disciplinary Board (2007) 231 CLR 350; Craddock v The Registrar of Firearms [2013] SADC 9; Hill v Commissioner of Police [2002] NSWADT 218; Sydney Pistol Club v Commissioner of Police [2012] NSWADT 121; Russell v Wilson (1923) CLR 538; Gollan v Nugent (1988) 166 CLR 18; Zammit v Registrar of Firearms [2010] SADC 100; R v Fuller; R v Zazzaro [2012] SASCFC 101; Pitchers v Police [2012] SASC 171; Registrar of Firearms v Gitsham (2002) 84 SASR 72; Johnson v Registrar of Firearms (2001) 79 SASR 353; Offe v Police (2002) 84 SASR 1; Pollitt v Police [2007] SASC 382; Zammit v Registrar of Firearms [2010] SADC 100; Ward v Commissioner of Police, NSW Police Service [2000] NSWADT 28, referred to.
Annetts v McCann (1990) 170 CLR 596; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; Davies v Registrar of Firearms [2005] SASC 149; Offe v Police (2002) 84 SASR 1; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, applied.

MARKSMAN TRAINING SYSTEMS PTY LTD v THE REGISTRAR OF FIREARMS (No 2)
[2015] SADC 5
Introduction

Following the resolution of a number of factual issues and the determination of certain questions of law and statutory construction arising in this appeal against decisions of the Registrar of Firearms (the Registrar), the matter returns to court for making final orders of disposition.[1]
[1] Marksman Training Systems Pty Ltd v The Registrar of Firearms [2014] SADC 150.
The underlying proceedings are appeals against decisions to cancel the appellant’s (Marksman) dealers and firearms range licences made by a Delegate of the Registrar. In sum it contends that the appeals should be allowed and the licences restored, whereas the Registrar maintains the cancellations must be affirmed given the conclusions reached in the primary judgment. This second judgment examines the remaining issues calling for determination and explains why it is appropriate to reinstate the licences, with conditions.
Procedural issues
Before turning to the various outstanding issues, it is necessary to recall that Marksman continues to trade and operate under the licences pursuant to consent Minutes of Order entered by a Master of this court pending the resolution of the appeals.[2] The court has already determined there are ‘cogent reasons’ to depart from the decisions of the Delegate, for the reasons articulated in the primary judgment.[3]
[2] Appendix A to the primary judgment.
[3] Primary judgment [178].
Even so, a number of specific findings by the Delegate detailed in the primary judgment, were upheld.[4] Of particular significance is the undoubted fact that 12 firearms requisitioned to Marksman remain unaccounted for.[5] Three firearms were later detected in the hands of convicted criminals or accused persons. These facts serve to impinge directly on safety to the public.[6]
[4] Primary judgment [180].
[5] Primary judgment [50], being firearms nos. 1, 3, 5, 10, 11, 23, 24, 26, 27, 55, 61 in the evidentiary chart, and a Glock self-loading pistol.
[6] Firearms 4, 15 and 16, primary judgment [92]-[94].
Given the court has already concluded that it is appropriate to depart from the decisions of the Delegate, no question of giving his decision ‘due weight’ remains, within the meaning of s 42E(3) of the District Court Act 1991 (SA), since the requirement to afford due weight is antecedent to departure from a decision under appeal. Subsequent to departure, the court is charged with the responsibility of substituting a decision it ‘considers appropriate’ pursuant to s 42F (c) thereof.
Regulation 16 allegations
Insofar as the Registrar relied upon breaches of reg 16 of the Firearms Regulations 2008 (SA) with respect to two firearms transferred through the agency of the dealership,[7] that contention can no longer be sustained for the reasons articulated in the first judgment.[8] Additionally, as Ms Dellit fairly points out, no offence is committed when Marksman has possession or use of firearms on its firearms range, so that conclusion disposes of any further issue adverse to Marksman with respect to the Gecado air rifle, serial number 48074PD and the Walther 9mm pistol serial number 023436. Her concession stems directly from the specific words of s 11(4)(a) of the Firearms Act 1977 (SA), which provides as follows:[9]
(4)     No offence is committed under this section in relation to a class A, B or H firearm by virtue of the fact that—
(a)a person has possession of, or uses, the firearm on the range of a recognised commercial range operator or at a shooting gallery in the normal course of the operation of the commercial range operator or the shooting gallery if the commercial range or the gallery is under the supervision of a responsible person who holds a firearms licence authorising possession of that firearm;
[7]    Delegate’s Reasons Appendix F.
[8]    Primary judgment [82]-[83].
[9]    It is conceded by the respondent that the relevant firearms come within Class A, B or H firearms.
No breach could therefore be committed by Marksman on account of the failure to keep records of firearms movements between the range and the dealership. In addition, such transfer would be authorised by s 15B(a)(b) of the Firearms Act, as it occurs ‘through the agency of a licensed dealing’. In any case pursuant to s 15D(1) thereof, a firearm is deemed to be retained in the possession of Marksman while it remains in its ‘physical possession or under its control’, and for that purpose is taken to be so ‘while the firearm is on premises of which that business is carried on’: s 15D(2)(c). There was accordingly no relevant transfer of possession through the agency of a dealer requiring the keeping of transfer records otherwise required by reg 16(1) of the Firearms Regulations.
Inadequate or erroneous record keeping
The Delegate originally determined 28 firearms were unaccounted for in the November 2012 audits, a process that checked the stock against the firearms register maintained by the Firearms Branch of the South Australian Police. This number grew to 37.[10] These are those firearms numbered 2, 7, 8, 9, 12, 13, 14, 17, 19, 20, 21, 22, 24, 32, 33, 34, 40, 42, 43, 44, 45, 46, 47, 48, 50, 51, 52, 53, 54, 56, 57, 58, 59, 60, 62, 63 and 64[11]. Further anomalies emerged following an audit of 10 June 2013, as listed in the primary judgment.[12] As to these, the following observations may be made:
[10] Delegate’s Reasons para 19b, and Appendix C.
[11] Primary judgment [46].
[12] Primary judgment [46]; firearm no. 47 was wrongly attributed in the primary judgment as belonging here, at [46] and [180 (4)].
. firearm 20 can be seen on the video of the audit;
.firearms 44 and 64 were in fact sighted by SAPOL at the audit;
.fourteen were produced on 19 January 2012 (firearms nos. 2, 8, 9, 13, 21, 22, 24, 32, 51, 53, 57, 58, 59 and 60) and a further two on 8 March 2012 (firearms nos. 33 and 47);
.twelve are admitted errors attributed to the failure to reconcile November returns (firearms 20, 42, 43, 44, 45, 46, 48, 50, 54, 56, 63 and 64);
.five are admitted record keeping errors by Marksman (firearms nos. 7, 12, 14, 19 and 34);
.a concession by the respondent during the most recent hearing that Marksman provided a record of outgoing movement with respect to firearm number 52.[13]
[13] T110.6-.21, 5/11/14.
Those firearms therefore as to which inconclusive findings were made are those numbered 2, 8, 9, 13, 17, 21, 22, 24, 32, 33, 40, 47, 51, 52, 53, 57, 58, 59 and 60, nineteen in all. Of these, all but five are accounted for in the manner just indicated.
It is an offence under s18 of the Firearms Act punishable by a fine of up to $5,000, for a dealer failing to keep ‘prescribed records’. What is in question here is the failure to complete records of firearms purchased and sold as proscribed by reg 15. This provides:
15—Records of firearms purchased and sold
(1)     A dealer must compile records in duplicate of firearms purchased and sold in a form approved by the Registrar for that purpose.
(2)     Within 7 days after the end of each month, the dealer must deliver the original records in respect of that month to the Registrar.
(3)     The duplicate copy of the records must be kept for at least 3 years at the dealer's premises.
(4)     If no firearms have been purchased or sold by a dealer during a month, the dealer must deliver a copy of the appropriate form to the Registrar with "Nil Return" written across it.
In sum then, of the 37 firearms originally in question, most are since explained. In a business operating a clumsy, outdated manual movement system with about 2,000 movements per year, say 55 movements a day, the oversights are not that significant, numerically speaking. The outcome of these proceedings on this issue turns largely on the adequacy of record-keeping systems now employed by Marksman and their capacity to eliminate these kinds of problems from arising again. That question is examined later in these reasons.
Failure to report potential theft of a firearm sooner[14]
[14] Primary judgment [118]-[119], 182.2.
At issue here is the failure to notify SAPOL of circumstances – to employ a neutral expression for the moment – of the suggested theft of a firearm, between late 2011 and 8 May 2012, a period of some five months. Before turning to the facts, it is necessary to again refer to statutory and regulatory obligations that pertain. Section 25 of the Firearms Act mandates the notification of a firearm ‘lost, stolen or destroyed’ within fourteen days of the date thereof, under penalty of an offence punishable by a fine of up to $5,000. In contrast, reg 22(1)(d) of the Firearms Regulations prescribes the same obligation without penal consequences.
However reg 61 of the Firearms Regulations makes it an offence punishable by a maximum penalty of $2,500, for any person who contravenes, or fails to comply with a provision of the regulations. Given that kind of penalty, charges alleging regulatory breaches are likely to constitute offences of strict responsibility, to which the general defences provided for in s 36A of the Firearms Act would not apply: He Kaw Teh v The Queen.[15]
[15] (1985) 157 CLR 523 applying R v Sault Ste. Marie [1978] 2 SCR 1299.
Mr J Marks of Marksman was first alerted to the possibility that an employee Mr C, might have taken a firearm from the Franklin Street premises as early as late December 2011. He did not report the matter to SAPOL until 8 May 2014. The court has not made conclusive findings about this aspect of the proceedings so far. However an observation was made that ‘no sufficient reason is demonstrated as to why a report was not made within the 14 days allowed’ and that ‘one is left to wonder why it took so long to report the potential theft’.[16] These reservations were expressed in the context of examining wider questions in relation to Mr C, and in light of strained relationships between the parties when questions of the degree of Marksman’s co-operation with the Firearms Branch was under consideration. No attempt was made to define the precise reporting requirements, given how the Delegate dealt with the issue.
[16] Primary judgment [119].
The Delegate considered this discrete issue in the same broader context (Appendix G). He concluded ‘an environment was created where it was possible for firearms to be stolen or removed from the premises without their absence being identified’.[17] The Delegate accepted ‘that the matters put by Marksman occurred’ but went on to consider none furnished sufficient reasons for not advising SAPOL of the concerns when they arose:[18]
It is a matter for SAPOL to investigate and determine the veracity or otherwise of such allegations and it is not a matter for Marksman.
[17] Appendix G13.
[18] Appendix G8.
It was in that context that the Delegate expressed misgivings about the failure to report sooner, rather than as a specific allegation of a breach of the obligations to report. Indeed, Appendix G is expressly referenced in paragraph 23 of the body of the decision as summarising the Delegate’s findings ‘concerning Mr C’s involvement in the theft of firearms from Marksman’. This explains why the matter was dealt with in confined terms in the primary judgment.
It is beside the point therefore to examine the specific adverse findings against Marksman by reason of supposed breaches of s 25 of the Firearms Act or reg 22 of the Firearms Regulations on account of this issue, as the Delegate did not go that far. No doubt his view on this topic contributed to the conclusion that Marksman displayed ‘a reluctance to work with SAPOL as the regulator of the firearms licensing scheme’.[19] Nor as matters stand, would it have been open to find breaches of either s 25(1) of the Firearms Act or reg 22(1)(d) of the Firearms Regulations. This is because there was no consideration of whether, or when, a firearm was ‘lost, stolen, or destroyed’ so as to trigger the obligation to report in the first place.
[19] Reasons para 56.
In point of fact, the information coming to the attention of Mr J Marks was that Mr C had removed and subsequently returned a firearm from the armoury (a firearm that may have belonged to him), rather than a report of theft as such. Still further, no consideration was given to the general defence available under the Firearms Act by s 36A, that is upon proof the:[20]
… offence was not committed intentionally and did not result from any failure on the part of the defendant to take reasonable care to avoid the commission of the offence.
[20] Refer to the analysis of s 36A in the primary judgment at [61]-[62].
There were legitimate reasons for Marksman prying further into the information from its point of view before reporting the matter to the police, nevertheless the observations made earlier as to the delay involved remain sound enough, taken in the discrete context in which they were intended.[21]
Missing firearms – the issues[22]
[21] A full account of Marksman’s explanations in relation to this subject can be found in Exhibit PMR 43, pp 585-596, and see T36.3-42.4, 5/11/14.
[22] Primary judgment [85], [94], [102]-[108], [116] and [121].
There is no doubt that the failure to account for the 12 missing firearms is a serious, indeed a central matter, so far as these appeals are concerned. Following the audit of November 2011, ten firearms registered to Marksman could not be accounted for. These are identified in the Delegate’s Reasons at paragraph 78, in the primary judgment at [50] and [68], and towards the beginning of these reasons.[23] Another two firearms were detected as missing following the audit of 10 June 2013, namely an Elgano Air no 24, and a Glock self loading pistol. The court has already made findings disposing of the issues surrounding firearms nos 1 and 5, so that it is effectively ten firearms outstanding that require consideration.[24]
[23] Footnote 5.
[24] Primary judgment [68], [71]-[72].
The case for the respondent is that the failure to account for these firearms is fatal to reinstatement of the licences. It is the position of Marksman that this situation came about only because of the intervention of what it described throughout its submissions as the ‘rogue employee’, Mr C. The considerable body of evidence pointing to the involvement of Mr C is marshalled in the primary judgment,[25] and the Delegate’s conclusions with respect thereto are recorded at paragraphs [105]-[108] thereof.
[25] Primary judgment [116].
The court has so far resiled from making conclusive findings as to the involvement of Mr C or otherwise, preferring merely to determine that it was not open to the delegate ‘to make affirmative findings about that as against that employee on procedural grounds’, and to note that the Delegate was not required to go that far. [26] Nevertheless the court observed:[27]
In this state of affairs it was simply not open to reject the theft hypothesis. The accumulated weight of the circumstantial evidence is too persuasive for that. It is tolerably clear however that the Delegate focussed on record keeping and security systems with respect to the missing guns.
I did proceed to make the further observation that there was the ‘significant prospect that Marksman was unsuspectingly duped by an employee’.[28] Marksman now submits that the court should complete its inquiry on this issue and proceed to make affirmative findings that Mr C was in fact responsible for the missing weapons.
[26] Primary judgment [120].
[27] Primary judgment [121].
[28] Primary judgment [181].
Missing firearms – procedural fairness
In most circumstances, findings cannot be made against third parties without affording that party procedural fairness. It was made clear by the High Court in Annetts v McCann,[29] that the rules of natural justice include the right to be heard in opposition to any potential finding which might prejudice a person’s interests. Indeed, should concrete findings be proposed against third parties, the proper course is to adjourn so as to afford the party an opportunity to obtain legal representation and to make submissions: Kuhl v Zurich Financial Services Australia Ltd.[30] The law proceeds on the basis that ‘reputation itself is to be protected as ‘an interest attracting the protection of the rules of natural justice’: Ainsworth v Criminal Justice Commission.[31]
[29] (1990) 170 CLR 596, 598, 599.
[30] (2011) 243 CLR 361 at [76].
[31] (1992) 175 CLR 564, 577-578.
The conjunction of circumstances giving rise to the inference of third party intervention in relation to the subject missing weapons is a strong one. The highly coincidental facts are that firearms were not reported missing before C’s period of employment between August 2010 and 8 May 2012 and not reported missing since, with the possible exception of the two later firearms, one of which and possibly both might have gone missing in that time. The very fact that SAPOL had seized from him on 8 August 2012 a Remington 308 and the barrel from a Glock firearm both belonging to Marksman, is a particularly telling piece of circumstantial evidence.

The objective circumstances are such that the distinct possibilities are that Marksman’s security systems were infiltrated to such an extent that the firearms were secreted off the premises without their knowledge, and it necessarily follows, without records of movements being made. Their omission was in a systems failure to detect this accumulated course of events in good time.
Normally, it is a defence to a criminal charge to show that a forbidden act occurred as the result of an act of a stranger: Norcock v Bowey,[32] Mayer v Marchant,[33] Allen v Chadwick.[34] The act of a stranger therefore potentially remains available to persons charged with offences under the Firearms Act in addition to those provided under s 36A. The question presently under discussion can be resolved in this way, without directly impinging on the interests of Mr C. On the basis of the proven facts and combined force of the circumstantial evidence, I conclude that Marksman has been subject to the act of a stranger in the loss or theft of the subject firearms.
[32] [1966] SASR 250, 266-269.
[33] (1973) 5 SASR 567, 573.
[34] [2014] 120 SASR 350, [126]-[130].
Whilst at common law it remained for the prosecution to rebut the defence once the evidential standard of proof was satisfied by a defendant, I am persuaded of this situation on the balance of probabilities, so that it is unnecessary to resolve any questions of conflict between s 36A and this common law defence, so far as the onus of proof is concerned. In view of the conjunction of the circumstances and the sustained rorting of firearms, I am prepared in the unusual circumstances to find on balance that the theft of firearms from the Franklin Street premises was not intentional on Marksman’s part, and did not result from any failure on its part to take reasonable care to avoid such thefts, within the meaning of s 36A of the Firearms Act, in any event. Section 36A of the Firearms Act ‘…prevents a person who can prove that they had no intention to do anything wrong and no knowledge that they were doing so from being convicted of an offence against the Act’: R v Fuller; R v Zazzaro.[35]
[35] [2012] SASCFC 101.
Auditing errors
Another issue arising for further consideration relates to auditing practices. In short, Marksman maintains the SAPOL audits were not nearly so accurate as they might at first appear to be. It was, as noted earlier, initially suggested by the Firearms Branch that 28 firearms were unaccounted as at the November 2011 audit, which had grown to 37 in number as of the hearing of the appeal.[36] The precise firearms involved are noted above.
[36] Delegate’s reasons para 19b, and Primary judgment [46].
It pays to bring into account that Marksman itself opened its operations to intense scrutiny by inviting SAPOL to conduct the 2009 and 2011 audits and that compliance after the former was considered ‘good’. The manual handling system of reporting requirements on carbon paper is inherently more prone to (human) error than an electronic system, such as that now operated by it. On the other hand, whilst the inability to access SAPOL records as a means of further cross-checking its own records might have in some instances made it difficult for Marksman to identify specific missing firearms, it furnishes little excuse for the failure to locate or reconcile from its own internal movement records.
Tagging errors seemed to have stemmed for the most part, from affixing labels to storage boxes rather than to firearms, a practice it has since abandoned. In addition Marksman filed approximately 11 late entries of outgoing movements with respect to firearms 6, 28, 29, 31, 35, 36, 37, 38, 39, 41 and 49, however SAPOL did confirm for itself that ‘the firearms had been moved as recorded’.[37]
[37] Delegate’s reasons, C10.
Admissions were made by Marksman from the beginning of erroneous record keeping with respect to 20 firearms.[38] Nine of those were ultimately found in the possession of their rightful owners, although appropriate records of movement were not completed. Therefore the admitted deficiencies were of no practical consequence so far as safety of the public was concerned with respect to those firearms.[39] It is another story with respect to the three firearms mentioned earlier found in the unlawful possession of known criminal elements.[40]
[38] Primary judgment [180], (4).
[39] These being firearms nos. 30, 31, 35, 36, 37, 38, 39, 41 and 49 in the evidentiary chart, primary judgment [46]-[47] and [68].
[40] Primary judgment [47].
The appellant complains of the high margin of error involved in the audit process on the part of SAPOL and points to the impediments involved in reconciling its own records against those kept by the Registrar of Firearms. The court has already found that it was conducted ‘methodically’, but that it certainly was not faultless or error proof, based on segments of the video footage of the November 2011 audit. As a consequence of that and the errors admitted by SAPOL, the Delegate ‘overstated the situation’ by failing to admit of any room for error.[41] The fact that the respondent admits it was responsible for 12 errors with respect to the reconciliation of the November returns as to firearms 20, 42, 43, 44, 45, 45, 48, 50, 54, 56, 63 and 64, is in itself sufficient demonstration of the existence of a considerable margin for error.
[41] Primary judgment [77].
As noted earlier, this issue becomes more germane when consideration is given to the systems now in place to avoid such errors. The fact remains that one has to view the audit results as hardly conclusive in light of the admitted errors on both sides. The admitted errors on Marksman’s part and the inconclusive nature of the material relating to 19 disputed firearms is documented above.
Insofar as the internal audit conducted by Marksman of H class firearms in April 2012 is concerned, although a discrepancy of 26 weapons at first emerged, it did produce 23 of those later when requested by SAPOL. For reasons explained in the primary judgment, this was an inaccurate and incomplete exercise, but it did admittedly expose the failure to account for one of the two missing firearms identified earlier.[42]
[42] Primary judgment [123].
So far as the second audit of 10 June 2013 is concerned, items 17c, d(i), (ii), f, i and k to the Gibson affidavit of 15 August 2013 are attributed to clerical or tag errors of the kind already discussed.[43] Those referred to in paragraphs 17g, i and j, are no longer applicable because of the concessions made by the respondent regarding the movement of firearms between the range and the dealership, discussed earlier. Six of the nine firearms referred to in paragraph 17d were found to be in the possession of their owners, so no impingement of the safety of the public was involved as such.
[43] Primary judgment [164].
The 28 firearms allegedly not recorded in the appropriate records as moving in or out of the dealership as referred to in paragraph [164] of the primary judgment, derive from Exhibit DCG-8 to Sergeant Gibson’s affidavit of 15 August 2013, in the following manner.
1.     Dealers Stock not Sighted
TAG                 SERIAL NUMBER      MAKE
D306                041C83720409             Elgamo Air
2.     Range Stock not Sighted
TAG                 SERIAL NUMBER      MAKE
PBZ855  Glock
3.     Dealership Stock Found On Range:
TAG                 SERIAL NUMBER      MAKE
B035                 22073663                   Ruger Pistol
C837                 21107708                   Stoeger Shot Gun
A792                7K1796  S/W revolver
4.     Range Stock Found in Dealership
TAG                 SERIAL NUMBER      MAKE
Nil                   515MP14535               Browning/FN Pistol Surrendered
Nil                   FAG7106                   Walther PSL
Nil                   PCH775  Glock PSL Surrendered
Nil                   1452052  Anschutz Bolt Action Rifle Surrendered
Repair               49039650                   Ruger Self Loading Pistol
Repair               J65946Z  Berretta Pistol Self Loading
5.Dealers Stock with no Record of Incoming (RIF) or Record of Outgoing (ROF) issues
TAG                 SERIAL NUMBER      MAKE
SFK Custodian 053C     SMG82480         M10
SFK Custodian 051C     NIL                  Replica Browning
SFK Custodian 054C     A1036               Replica Revolver
SFK Custodian 047C     050711               Kinar 911 PSL
SFK Custodian 048C     1720                  Luger PSL
SFK Custodian 055C     NIL                  AK47 Imitation
SFK Custodian 049C     NIL                  Colt 1911
6.     Dealers Firearms on range
AB38789  Tangfolglio PSL
PBZ850  Glock PSL
17389206  Ruger Revolver
55249290  Ruger Revolver
55255997  Ruger Revolver
FAG7173  Walther
22073663  Sturm Ruger
7K1796  Smith & Wesson
21107708  Stoeger
7.     Custodian Firearm confirmed with owner no record of movement
TAG                 SERIAL NUMBER      MAKE
SFK                  LBX06245                  Forjas Taurus
8.     Club Firearm located on Range
SERIAL NUMBER  MAKE
55256061  Sturm Ruger
9.     Firearms Incorrectly Tagged
TAG                 SERIAL NUMBER      MAKE
SFK                  N/A  Imitation 1911.45
SFK                  N/A  Imitation Revolver
SFK                  N/A  Imitation Heckler & Koch
SKF                 N/A  Imitation PSL
D972                 BRF627  Glock PSL
The six firearms listed in item 4 therein, were taken from the range to the dealership for surrender on the day of this audit, as to which no record of movement was required, for the reasons advanced earlier. The same applies to item 3 therein. As to the sixth firearm in item 4, there was in fact a record of movement made on 7 June 2013,[44] and Marksman admitted a serial number transcription error as to the second firearm therein. The five firearms said to be incorrectly tagged in paragraph 17k of the Gibson affidavit, are listed under item 9 in DCG-8. Mr Andrew Marks has not unreasonably complained in paragraph 20 of his second affidavit of 29 August 2013 that it is impossible to respond to this allegation as ‘no details are provided … as to the specific errors in tagging that are alleged …’.
[44] Exhibit AGM-6 to the affidavit of Andrew Marks dated 29 August 2013.
As to the seven imitation firearms referred to in paragraph 17e of the Gibson affidavit (item 5 in DCG-8), the court has already dealt with two of those suspected of being prescribed.[45] Mr Marks deposes that all seven were brought into the dealership for safe keeping by their owners and that he ‘mistakenly entered these in the … records of outgoing firearms rather than into the … records of incoming firearms’.[46] He went on to explain that upon realising the error, he directed the entries be voided and re-entered into the incoming records, but they were not. The original erroneous records contained in Exhibit AGM-9 confirm this state of affairs.
[45] Primary judgment [149]-[160].
[46] Affidavit para 33.
Otherwise item 1 of DGM-8 is the missing firearm no 24 attributed by Marksman to Mr C, as is the Glock PBZ855 in item 2. These firearms were dealt with earlier.
As to item 3 therein, ‘dealership stock found on the range’, Mr Marks further deposes that the first firearm is in fact registered to the range licence, the certificate of which he exhibits at AGM-3, so this firearm is incorrectly recorded in the Firearms Register as belonging to the dealership. Likewise the third firearm in item 3 is in fact registered under the range licence (Exhibit AGM-4). With respect to item 7, it is conceded by the appellant that the firearm was returned to its owner without making an outgoing record. Once again there was no risk to the safety of the public, however as with all records failures, the ease of tracking firearms movements was compromised. As a result therefore, there are not nearly so many ‘discrepancies’ arising from the audit of 10 June 2013 which the Delegate was prepared to rely on in making the cancellation directions.
Protection of the Public
There can be no doubting the proposition that for the purposes of the effective administration of the Firearms Act, the protection of the public is a paramount consideration:[47]
[47] Pitchers v Police [2012] SASC 171, [8]-[12]; Registrar of Firearms v Gitsham (2002) 84 SASR 72, 76; Johnson v Registrar of Firearms (2001) 79 SASR 353, 357; Offe v Police (2002) 84 SASR 1, [22], [26]; Pollitt v Police [2007] SASC 382, [20]-[23], Zammit v Registrar of Firearms [2010] SADC 100, [37].
In Davies v Registrar of Firearms,[48] Gray J observed:
[23] There is a clear need for the provisions of the Firearms Act 1977 and Regulations to be complied with. It is important that the community generally is aware of the need for careful and strict compliance. The legislative scheme for gun control requires compliance for its efficacy. Compliance with the Act and Regulations may cause a degree of inconvenience but the dangers of poor gun control are too evident in our society for matters of non-compliance to be disregarded or overlooked.
[48] [2005] SASC 149.
There are numerous judicial statements to like effect: Jaworski v Police,[49] Registrar of Firearms v Gitsham,[50] and Golding v Police,[51] as well as by David J in Police v Losapio,[52] who added:
[21] … The possession of firearms is a privilege and a serious responsibility. It is entirely consistent with the legislative scheme that the holders of firearms licences be carefully scrutinised to ensure they are of appropriate character to bear this responsibility. At the same time, characters change over time and offences in the past need not permanently prevent an individual from holding a firearms licence.
And in Offe v Police Gray J also said:[53]
[26] … The community must not be complacent about the dangers of firearms and the damage that can be caused when they are not kept in accordance with the legislative requirements. Not only are weapons targets for thieves, they present a real danger to unsuspecting children and persons who may happen across them accidentally…
[49] [2009] SASC 284, [22-25].
[50] (2002) 84 SASR 72 at 76.
[51] [2007] SASC 159 at [18].
[52] [2007] SASC 112, [21].
[53] (2002) 84 SASR 1, 9-10; cited with approval by the Court of Criminal Appeal in R v Nash (2008) 100 SASR 109, [26], and see R v Flitter [2010] 1 Cr App R(S) 85.
Section 20 of the Firearms Act provides an effective means for the cancellation, variation and suspension of firearms licences, so it is pivotal in giving effect to these statutory purposes: Davies v Registrar of Firearms.[54]
[54] [2005] SASC 149, [5].
The respondent emphasises the failure to account for the missing firearms, that three were discovered in the hands of convicted criminals or accused persons, and the record keeping imperfections referred to earlier, combine to render the only proper disposition to affirm the cancellations. For its part, Marksman points to the fact that they employ honest persons deemed to be ‘fit and proper’ to hold Dealer’s Assistant licences and whom are subject to regular employment review, its voluntary system of training, and that it invited SAPOL to conduct the audits of 2009 and 2011 (quite apart from its own internal audit of H Class handguns in April 2012). Marksman submits these considerations militate in support of reinstating the licences.
The present ‘Epitome’ electronic monitoring system tracking the movement of firearms has proven to be effective since full implementation in May 2013. Unlike the manual records kept in the past, this present system is capable of detecting thefts and correcting record keeping or tagging errors. It was introduced at considerable expense to Marksman and created expressly for the very purposes of addressing the problems of the past. They have devised prototypes for tethering firearms and indicated a willingness to submit to conditions should the licences be reinstated as a gesture of cooperativeness and compliance. It further points to the fact that there will be serious consequences if cancellation is affirmed, a position accepted by the Registrar in his decisions.[55]
[55] Delegate’s Reasons paras 59 and 64.
The public interest
The question of meeting the requirements of the public interest is an important one in the context of holding Firearms Licences. The public interest furnishes an additional stand-alone basis for the cancellation or variation of extant firearms licences, under s 20(1a)(a) of the Firearms Act, although it does not with respect to the Dealer’s Licence. An assessment of the public interest requires the court to make a value judgment according to the scheme and policy of the Firearms Act and its evident purposes. The concept embraces a wide range of considerations, particularly paying regard to the necessity of ensuring public safety, so that any continuing risk to the public in keeping a licence is a very material consideration.[56] It is relevant to consider the nature of proven breaches, the explanations therefore, the potential risk to the public in the exposure of firearms to criminal elements and the steps taken to redeem infringements, amongst other considerations. It is well understood and acknowledged by the courts that the possession and use of illegally obtained or modified firearms are attributes of criminal elements within our society: R v Cluse.[57] Although the respondent has amply demonstrated an unacceptable risk to the public in the past, it has failed to demonstrate such risk has continued since mid 2013.
[56] Ward v Commissioner of Police, NSW Police Service [2000] NSWADT 28, [28].
[57] (2014) 120 SASR 268, [62].
Fitness and propriety
Issues of fitness and propriety relate to both licences because s 20(1)(b) of the Firearms Act entitles the Registrar to cancel them, upon becoming satisfied the holder ‘is, for any reason, not a fit and proper person to hold the licence’. As noted by the Full Court in Teachers Registration Board of South Australia v Edwards,[58] the meaning of such phrases are informed by the object of the legislation in which they sit. In this instance, it means that to hold a firearms licence of each description, and in the possession, use and sale of firearms in those respects, that questions of honesty, knowledge, skill and ability to hold the licences for those purposes are significant considerations: Hughes and Vale Pty Ltd v New South Wales (No 2),[59] Albarran v Companies Auditors and Liquidators Disciplinary Board,[60] Craddock v The Registrar of Firearms.[61] As pointed out in the primary judgment, that question invites an inquiry as to the state of affairs as they exist at the present time.[62]
[58] (2013) 117 SASR 246, [48].
[59] (1955) 93 CLR 127, 156-157.
[60] (2007) 231 CLR 350, [23].
[61] [2013] SADC 9, [15].
[62] Primary judgment [173].
The content of the fitness and propriety qualification for holding a Firearms Licence is further informed by ss 5(10) - 5(13) of the Firearms Act. Of most relevance to this case are ss 5(11) and 5(13) which respectively read:
(11)For the purposes of this Act a person may be taken not to be a fit and proper person to have possession of a firearm or ammunition or to hold or have possession of a licence if the person—
(a) has not complied with the requirements of this Act in relation to the safe handling, carriage or use of firearms; or
…
(ca) has been found guilty of an offence prescribed by regulation; or
…
(13)In deciding whether a person is a fit and proper person to have possession of a firearm or ammunition or to hold or have possession of a licence for the purposes of this Act, regard may be had to the reputation, honesty and integrity of the person and of people with whom the person associates.
It might be noted that these statutory prescriptions do not otherwise ‘limit the grounds on which a person may be taken not to be a fit and proper person’: s 5(12) Firearms Act. The High Court observed in Australian Broadcasting Tribunal v Bond:[63]
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 who is or will be engaging in these 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.
[63] (1990) 170 CLR 321, 380, joint judgment of Toohey & Gaudron JJ.

Marksman has been conducting business since 1984 without contravention before the recent matters arose. The present directors maintain an unblemished record and positive reputation within the firearms community. One has an extensive record in the safe handling and use of firearms over a number of decades. As noted in the primary judgment, Mr A Marks has a wealth of experience in firearms.[64] There are no other breaches of security other than those described.
[64] Para [47].
In this instance improper conduct has occurred in the past, a good deal of which was outside Marksman’s effective control, but it has ceased for a significant period of time to the present. Given its recent record and the management systems described earlier now implemented, improper conduct is not likely to occur in the future, and given its adherence to strict protocols under the supervision of the consent court order, the public should have confidence that it will remain so.
Licence retention – analysis
In weighing the competing interests, the policy considerations identified earlier, the incidence of and duration of poor gun control were significant, but not nearly so extensive as the Delegate considered them to be. For the most part poor record keeping was attributable to clerical or administrative errors and in the failure to keep due track of firearms movements. The failure to account for missing firearms are explained by the unlawful subterfuge and interdiction of strangers. It is the latter consideration in particular that serves to distinguish this case from a number of decisions referred to by Mr Golding counsel for the respondent: Hill v Commissioner of Police,[65] Sydney Pistol Club v Commissioner of Police,[66] Davies v Registrar of Firearms.[67]
[65] [2002] NSWADT 218.
[66] [2012] NSWADT 121.
[67] Above, [2005] SASC 149.
Marksman now has effective systems in operation to prevent recurrences. It has complied for over 18 months with the strict terms of the consent order. For so long as Marksman continues to trade in both licence capacities without further blemish, as they have under the consent orders, it remains fit and proper to retain the privilege of holding the licences and it is in that situation in the public interest that they should, so far as the firearms licence is concerned.
Conditions of licence?
There is an antecedent question as to whether or not it is appropriate to impose conditions of licence at all, as distinct from what they should be, if upon due consideration conditions are considered appropriate. The capacity of the Registrar to impose conditions of a Dealer’s Licence is provided for in s 17(4)(1)(a) of the Firearms Act, whereas the power to impose conditions of a Firearms Licence is contained in s 13(5) thereof. The Registrar considered conditions inappropriate with respect to both firearms for reasons expressed in identical terms: [68]
I have given lengthy consideration to the imposition of conditions particularly in light of the fact that this licence is essential to the livelihood of Marksman’s Directors and employees, however because of the gross negligence displayed by Marksman and my finding that Marksman lacks fitness and propriety I have determined that the imposition of conditions is not appropriate in the circumstances.
[68] Delegate’s Reasons 59 and 64 respectively.
The particulars of gross negligence are not specified in so many words, but they must be referable to the perceived breaches identified earlier in the Delegate’s reasons. The adverse finding of fitness and propriety also derives from the same conclusion that Marksman had ‘demonstrated an inability to conduct its business in such a way as to protect the public by ensuring firearms are accounted for and readily identified as missing’.[69] To a large extent these conclusions have now effectively been set aside or heavily qualified because of the conclusions reached in the primary judgment and earlier in these reasons.
[69] Delegate’s Reasons 58 and 62 respectively.
It was contended by Mr Golding on behalf of the Registrar that it is inappropriate to impose conditions because there are effective powers of inspection within the Firearms Act itself, through the avenues provided for in ss 30, 31 and 32 thereof and in reg 22(1)(j) and 22(1)(k) of the Firearms Regulations. That may be accepted. The conditions as proposed by Marksman set out below, do not however presuppose that Marksman is in a position to use the Firearms Branch to undertake, check or supervise its own fortnightly checks. It must take responsibility for that itself.
All things considered, it is appropriate to impose further conditions with respect to both licences for a period of 12 months from the date final orders are entered, so as to reinforce due compliance, as a means of implementing the current Epitome system over a greater period of time than has been available at present, and so as to reinforce the confidence in the Community that Marksman will adhere to its obligations as firearms licence holders. The conditions proposed by Marksman are effectively these:
Dealer’s Licence 280611L:
1.     It will not accept firearms for surrender.
2.     It will provide to the Registrar on a fortnightly basis:
2.1     its records of incoming firearms and records of outgoing firearms;
2.2     printouts of its current lists of stock as recorded in its Epitome stocktaking system.
3.     The total number of firearms to be held in its dealership stock (including firearms for sale, safekeeping consignment or repair) held on its premises at any one time is not to exceed 275.
4.     It will not accept any additional firearms for safe-keeping (that is, for storing on behalf of others), except to facilitate the repair, cleaning or modification of such firearms.
5.     Any firearms taken into the possession of the Registrar pursuant to order 1(j) of the 4 June Court Orders shall remain in the Registrar’s possession for a period of 12 months, save that nothing in this order shall prevent the Appellant from surrendering firearms to the Respondent (whether or not such firearms are already in the Respondent’s possession).[70]
[70] Clause 1(j) of the Consent Order, entitled the Registrar to ‘take possession of such firearms which exceed the number provided for in these conditions …’.
Firearms Licence 315699D:
1.     The total number of firearms stored by its indoor commercial firing range at any one time shall remain at 86.
2.     It may store additional firearms held pursuant to Firearms Licence 315699D in the armoury on the premises of the dealership, provided that any such additional firearms shall be included in the total of 275 firearms.
These conditions represent a significant reduction in the combined number of some 600 firearms Marksman previously dealt with. The reporting requirements mirror the fact that stocktaking is undertaken every 14 days.
The submission by Mr Golding that it is inappropriate to allow for applications to the court to vary, revoke or extend the conditions within the 12 months during which they pertain, by means of an order in each instance for ‘liberty to apply’, should be accepted, as to do so would serve to allow effective judicial monitoring, and fail to achieve the mutual objective of bringing these proceedings to finalisation. The conditions should be seen and enforced as if they were conditions of licence imposed by the Registrar. It is here that the extant powers of inspection could be properly employed.
The question of making orders relating to firearms belonging to Marksman presently in police custody according to proposed condition no. 5 of the Dealer’s Licence, should stand over for further submissions. Uninformed by argument on the point, it is difficult at present to see how seized firearms form any part of the Delegate’s decision, or over which the court has jurisdiction in appeals of this nature. It would appear at first blush that its remedy lies in an action in detinue, or perhaps replevin: Russell v Wilson,[71] Gollan v Nugent.[72] Furthermore as I pointed out in Zammit v Registrar of Firearms,[73] this may well be a situation controlled by s 34 of the Firearms Act. For the same reason a further condition proposed by Marksman permitting Marksman access to firearms held by SAPOL and the exchange of firearms in terms contained in clause 1(n) of the Consent Order of 4 June 2013, is stood over for further submissions.
[71] (1923) 33 CLR 538.
[72] (1988) 166 CLR 18.
[73] [2010] SADC 100 at [15].
Nothing should be taken from these or the primary reasons, to encourage the view that breaches of firearms licenses are readily excusable, or that the loss of licences is other than a realistic measure on proof of serious breaches of the Firearms Act or the Firearms Regulations. The result in this case is very much a product of the unique conclusion that Marksman was the victim of aberrant circumstances beyond its control, particularly so far as the missing firearms are concerned. Nor should anything the court has written be taken to control or circumscribe the powers the Registrar (or his Delegate) may continue to lawfully exercise under the Firearms Act and the Firearms Regulations, for the proper and effective administration thereof, or as otherwise curtailing the due prosecution of offences that may occur thereunder.
Conclusion and orders
For the above reasons (in conjunction with those contained in the judgment of the court delivered on 29 August 2014), the appeals are allowed, the determinations of the Delegate of the Registrar of Firearms to cancel Marksman Training Systems Pty Ltd Dealer’s Licence No. 280511L and Range Licence No. 315699D are rescinded. In lieu thereof it is ordered that the licences be reinstated. The parties should be heard on the finer detail of the proposed conditions of licence before final orders are made, including the number of firearms involved in respect of each licence.
Questions of costs and the fate of seized firearms remaining in the custody of the Registrar also remain for further consideration. Once final orders are pronounced, the current consent orders must of course be discharged.