Rizen Smash Repairs Pty Ltd and Alfar v Dirrector General, Department of Fair Trading

[2002] NSWADT 173

CITATION:	Rizen Smash Repairs Pty Ltd and Alfar -v- Dirrector General, Department of Fair Trading [2002] NSWADT 173
DIVISION:	General Division
PARTIES:	FIRST APPLICANT Rizen Smash Repairs Pty Ltd SECOND RESPONDENT Reziq (Khaled) Alfar RESPONDENT Director General, Department of Fair Trading Rez
FILE NUMBER:	023175 & 023176
HEARING DATES:	16/09/02
SUBMISSIONS CLOSED:	09/16/2002
DATE OF DECISION:	09/19/2002
BEFORE:	O'Connor K - DCJ (President)
APPLICATION:	Fair Trading Act 1987 - Motor Vehicle Repairer - suspension of licence - Motor Vehicle Repairer - suspension of licence
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Fair Trading Act 1987 Motor Vehicle Repairs Act 1980 Victorian Civil and Administrative Tribunal Act 1998
CASES CITED:	Washington Gray Pty Ltd & Gough v Director General, Department of Fair Trading [2001] NSWADT 209 Hempel v Moore (1986) 70 ALR 551 George v Rockett and Anor (1990) 170 CLR 104 Tropea v Director General, Department of Fair Trading [2001] NSWADT 158
REPRESENTATION:	APPLICANT H Dhanji, barrister A Wilson, solicitor
ORDERS:	1 Decision under review affirmed; 2 The respondent pay the applicant's costs of the adjournment on 3 September 2002

1 On 1 August 2002 the Director General, Department of Fair Trading, exercising the power granted by s 64A of the Fair Trading Act 1987 (FTA), suspended for 60 days licences held by Rizen Smash Repairs Pty Ltd (Rizen Smash Repairs) and Mr Reziq (also known as Khaled) Alfar (Mr Alfar).

2 The licences were issued under the Motor Vehicle Repairers Act 1980 (the MVRA). Rizen Smash Repairs is permitted to undertake business at 10 Hargraves Place, Wetherill Park in relation to the following classes of repair – ‘Painter Tradesperson, Panelbeater’. Mr Alfar is permitted to undertake the work of ‘motor mechanic’. His licence notes that his trading name is Jade Auto Mechanical Repairs, located at 287 Liverpool Road, Enfield. Mr Alfar is a co-director of Rizen Smash Repairs, along with Mr Yacoub Ghandour.

3 The licensees have applied for review of the decision to suspend the licences under s 64A(8), FTA. The material provisions of s 64A are as follows.

‘ 64A. Suspension of licences

(1) In this section, "licence" means any licence, permit or other authority granted or issued (whether before or after the commencement of this section) under any legislation administered by the Minister, and "licensee" means the holder of the licence, permit or authority.

(2) If the Director-General is of the opinion that there are reasonable grounds to believe that:

(a) a licensee has engaged in conduct that, under legislation administered by the Minister, constitutes grounds for suspension or cancellation of the licence, and

(b) it is likely that the licensee will continue to engage in that conduct, and

(c) there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently,

the Director-General may, by notice served on the licensee, suspend the licence for a period of not more than 60 days specified in the notice, commencing on service of the notice.

(3) A notice under subsection (2) has effect according to its terms, whether or not the licensee has been afforded an opportunity to be heard as to whether the licence should be suspended.

(4) ...

(5) If, during the suspension of a licence under this section, the Director-General is satisfied that the facts and circumstances that gave rise to the suspension have so altered that the suspension should be terminated, it is the duty of the Director-General, by further notice specifying the date of termination, to terminate the suspension without delay and restore the licence to the licensee.

(6) Without affecting the generality of subsection (2):

(a) a second or subsequent notice may be served on a licensee under that subsection in respect of conduct of the kind to which that subsection refers, and

(b) any such notice may be served during a period of suspension of the licence concerned.

(7) This section has effect despite the provisions of any other Act, and the power conferred by this section is in addition to, and does not limit or displace, a power conferred by or under any other Act that authorises the Director-General or any other person to suspend or cancel a licence or take other action in respect of a licence or in respect of the conduct concerned.

(8) A licensee may apply to the Administrative Decisions Tribunal for a review of a decision of the Director-General under this section.’

4 The MVRA is legislation administered by the Minister for Fair Trading. It will be noted that the Director General may issue further notices of suspension after the expiry of the first 60 day period.

5 The Tribunal has adopted special procedures for hearing applications for review of suspensions, to ensure that they are dealt with expeditiously: Practice Note 9 dated 15 July 2002.

6 By virtue of s 8 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act), ‘[a] "reviewable decision" is a decision of an administrator that the Tribunal has jurisdiction under an enactment to review.’ The Tribunal’s powers are conferred by s 63 of the Tribunal Act, which provides:

‘ 63. Determination of review by Tribunal

(1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following:

(a) any relevant factual material,

(b) any applicable written or unwritten law.

(2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision.

(3) In determining an application for the review of a reviewable decision, the Tribunal may decide:

(a) to affirm the reviewable decision, or

(b) to vary the reviewable decision, or

(c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or

(d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.’

7 On 12 August 2002 the Tribunal dealt with further applications made by the review applicants under s 60 of the Tribunal Act for stay of the suspensions. The applications were refused. In accordance with the Practice Note time-table, the present applications for review of the suspensions were listed for hearing on 3 September 2002. The Director General served the material on which he relied shortly before the hearing was due to commence, leading to applications for adjournment which were granted. The applicants applied for the costs of the adjournment. The Tribunal reserved its decision. The decision is given at the end of these reasons.

8 The hearing was rescheduled to 16 September 2002, and proceeded on that date.

9 This decision deals with both applications for review. The first was filed in the names of Mr Ghandour and Mr Alfar as co-directors of Rizen Smash Repairs (matter no 023175). The second was filed in the name of Mr Alfar and relates to his individual licence in connection with his Jade Automotives business (matter no 023176). The proper applicant in the first case should be the licensee, Rizen Smash Repairs, and the title of the case has been amended to reflect that.

The Notices of Suspension

10 The suspensions were issued on 1 August 2002, in response to police advice (letter dated 30 July 2002) to the Director General alleging that Messrs Alfar and Ghandour and their associated businesses were connected to a major conspiracy led by a Mr George El Far involving the stealing, dismantling and ‘rebirthing’ of motor vehicles; and in staging motor collisions and making inflated and false insurance claims. In each case the Director General’s notice attached a statement of grounds, a schedule of conduct and reasons for decision.

11 The notices assert that the applicants have engaged in conduct which as licensees may be dealt with under the disciplinary provisions of the MVRA (Part 4) in that the ‘business to which the licence relates is being carried on in a dishonest or unfair manner’ (see s 42(1)(h)). Under s 44, MVRA the Motor Vehicle Repair Industry Authority may suspend or cancel the licence if any of the grounds in s 42(1) have been made out.

12 Mr Ghandour was charged on 1 August 2002 with conspiring with George El Far, Julie El Far, Awatef El Far, Artin Youseff and others to cheat and defraud insurance companies. The police state that the conspiracy formed part of an organised racket directed ultimately by George El Far. The racket involved car theft, rebirthing and the export of stolen cars to overseas destinations; as well as the staging of collisions, with the object of defrauding insurance companies through bogus and inflated claims. The charges followed a major police operation, Task Force Worth, targetting suspected persons and their premises, which culminated in the execution of search warrants at a number of locations on 31 July 2002.

13 The material on which the Director General relies is found in Ex B of file 0230175 (Rizen Smash Repairs); and in Ex B of file 0230176 in the case of Mr Alfar’s individual licence.

14 The Practice Note provides:

‘ 4. Conduct of the hearing. The hearing will generally proceed on the basis of the written material provided by the applicant and the Department. Oral evidence, including cross-examination of parties and witnesses, may be allowed in special circumstances. This could occur for example, where the applicant is not assisted by a lawyer.’

15 The Director General relied on its filed material, with the police officer heading the investigation, Detective Casserley, available if required. The applicants also relied on the filed material. Mr Ghandour and Mr Alfar each filed an affidavit in which they addressed their recent business history, particular aspects of the case made against them and the financial hardships they now faced.

16 It is accepted that Mr Ghandour and Mr Alfar first became directly involved in the business of Rizen Smash Repairs on 17 May 2002. A new licence was issued by the Department on that day, naming Mr Ghandour and Mr Alfar as co-directors. Mr Ghandour and Mr Alfar say that they bought the business on 2 June 2002. Mr Ghandour, an experienced panel beater, ran the business. Mr Alfar said that he was merely a financial partner, though he is reported as visiting on a regular basis. Mr Alfar, an experienced motor mechanic, continued to operate his mechanical repairs workshop (Jade Automotives). Each business has two employees.

17 The Director General relies on the Police Facts Sheets and supporting documentation (statements from the applicants, statements from employees, seized documents, expert statements) to establish the requirements of s 64A(2)(a), (b) and (c) of the FTA in respect of both Rizen Smash Repairs and Mr Alfar.

Particulars Relied Upon

18 General: In its letter of 30 July 2002 the NSW Police Service wrote to the Director General under the heading, ‘Suspension of licensed motor vehicle repairers and motor dealers’. It advised the Director General of its investigations, and it referred to seven businesses said to be connected with the corrupt activities. First and third on the list of named businesses were Rizen Smash Repairs and Jade Automotives.

19 The police stated that George El Far was the former owner of Rizen Smash Repairs; and that he had sold it to Messrs Ghandour and Alfar on 2 June 2002. On the same day he left with his son for Jordan (one of the countries to which it is said the rebirthed vehicles are sold). It is said that his wife, Awatef El Far has taken over the lead role in the perpetration of these frauds. It is said that Artin Youseff is an associate of the El Far family and liaises between members of the El Far family and motor vehicle repairers such as Mr Ghandour and Mr Alfar. It is asserted that Mr Ghandour organises fraudulent quotes for vehicles at the request of the El Far family. It is said that these quotes are a necessary facet of the conspiracy that allows the El Fars to defraud insurance companies. It is said that from the beginning of May a number of lawful intercepts have been initiated. It is said that these intercepts have captured thousands of telephone calls between the El Far family, Ghandour, Youseff and Alfar. It is said that a large number of these calls are conversations that directly implicate them in the criminal enterprise.

20 Under the heading ‘Jade Auto Mechanical Repairs’ the police state that it is their belief that the workshop is staffed by associates of George El Far; and that it is possibly a place where rebirthing takes place and vehicle components are altered. The police refer to criminal history records relating to ‘Reziq Alfar’ (Mr Alfar’s given name), and convictions for theft offences in the 1989-90 which it is said were linked to George El Far.

(1) Rizen Smash Repairs

21 The following particular circumstances were drawn to attention at hearing.

22 Circumstance 1: Staged collision at intersection of John and Harrington Streets, Cabramatta, 17 April 2002.

23 For reasons given in the police material, the police have concluded that the collision was staged. One of the three cars involved in the above event was a Toyota Camry VVN700. The police rely on telephone intercepts that record George El Far. On 2 June 2002 he is heard arranging repairs and their price in relation to the vehicles involved in the collision with among others, the registered owner of the Camry, a James Vuong. The connection to Rizen Smash Repairs is made by one of the documents seized at the search of the premises. This document (p 78 of Ex B, file 023175) is a quote dated 24 May 2002 given by ‘Jack’ to the owner of the vehicle (James Vuong). The quote is in the amount of $939.60. That Mr Ghandour (given first name Yacoub) is known as ‘Jack’ is, it is said, established by an admission by Mr Ghandour (at p 106 of Ex B).

24 Circumstance 2: Staged collision at Rosetti Street, Wetherill Park, 17 April 2002

25 For reasons given in the police material, the police have concluded that the collision was staged and occurred on the same day as the first collision mentioned (Circumstance 1) and involved two of the same cars, including the same Toyota Camry VVN 700. The driver of the Camry is a Mr J Shamoon. The police intercepts record a conversation between Michelle of Rizen Smash Repairs and George El Far in which she seeks details of the smash that the car was involved in, and he gives the Cabramatta details. Mr Ghandour gave a quote, again on 24 May 2002, in relation to the damage to that vehicle to Mr Shamoon (p 64 of Ex B). The quote (typed) contains numerous strike-outs and amount alterations, and has handwritten on it at the end ‘not authorised’

26 The Director General points to the inter-connectedness of these two events – on the same day, Mr Ghandour gave more than one quote for damage to different persons in respect of the same car that had been involved in two collisions on the one day. The Director General’s submission is that an experienced panel beater (as was Mr Ghandour) would have recognised that there was suspicious activity involving the car; not given the quotes; and reported the matters to police.

27 Circumstance 3: Staged collision at intersection of Cowpasture Road and Horsley Drive, Horsley Park, 29 April 2002

28 One of the cars involved was AJD 38G, a Lexus ES 300 sedan. Police intercepts record conversations involving George El Far telling a male to take the car to ‘Yacoub’ (2 June 2002). There are a series of phone calls between Awatef El Far and Mr Ghandour on 11 June 2002. In the first, Mr Ghandour is asked to do a new quote for the Lexus as there is more damage now than there was originally. She calls again about 20 minutes later and advises that the assessor will call the next day in respect of repairs. Mr Ghandour discusses the possibility of raising the price for the work by $2000-$3000 (same conversation). Mr Ghandour is recorded as saying he has done a lot of quotes for George in the past (same conversation). There is a further call 5 hours later from Mr Ghandour to Awatef saying that he has done a new quote for the Lexus and that he raised it by $2500. There is a discussion about the new damage to the vehicle. Mr Ghandour is recorded as saying that she (Awatef) did not need to smash it more because he had already quoted it and it did not matter if there was a little bit or a lot of damage to the back because they would have received payment anyway. There is a call from Awatef to another alleged principal in the conspiracy, Youseff, advising that Ghandour is to do the job. There is another call early the next morning (12 June) between Awatef and Ghandour. Ghandour is recorded as expressing concern about the second lot of damage, describing it as a ‘stuff up’ and asking her to take the car away, as the assessor, he feels, will definitely reject the quote. There is a further more angry call later that day from Ghandour to Awatef complaining about being given this job. At this point it would appear to be the case that Ghandour does not want to proceed with the job. It is unclear whether he did proceed with it, anyway.

29 Circumstance 4: Presence of stolen motor cycle on premises.

30 During the search of the premises of Rizen Smash Repairs on 31 July 2002, a stolen vehicle was recovered, a ‘Gilera’ motor scooter. The scooter had been reported stolen by the owner, from Woollahra on 14 July 2002. The police material (pp 102-103, Ex B, file 023175) contains a statement by an expert police examiner, Sen Const B J Williams (headed Certificate of Expert Evidence, Section 177, Evidence Act 1995) as to attributes of this vehicle. He noted that the scooter was not bearing any registration plates at the time of his inspection (2 September 2002, the seized items were taken to a secure warehouse). He found that the vehicle identification number had been ground from the right side of the frame. He found that the engine number had been obliterated and could not be read. The ignition system for the scooter had been smashed allowing the vehicle to be started without a key. The scooter was substantially dismantled. All that was left intact was a bare frame with engine and wheels exposed. The expert noted that it had only travelled 350 kilometres. These circumstances are, the police assert, all consistent with an attempt to give the scooter a new identity and then to on-sell it.

31 The synopsis of the police interview of Mr Ghandour (pp 106-107) records evasive answers to questions relating to the origins and reason for the scooter being at his workshop. At one point he says that he does not know the name of the owner but Mr Alfar does. At another point he speculates that Mr Alfar may have been at the premises when the job came in, and took it. He only describes, in any case, minor damage to the vehicle (damage to plastic cover). He refers later in the interview to Mr Alfar’s son coming in, and saying he would strip the bike. Mr Ghandour says that he allowed Mr Alfar’s son to remove the plastic from the bike. He was queried as to the absence of keys. He then says that Mr Alfar brought the bike to the shop.

32 An employee (Kel Joseph Taylor, at p 100, Ex B) estimates that the scooter arrived about two weeks before the police search, which locates the time of arrival shortly after it was reported stolen. He said that it had a great deal of damage all over and looked as though it had been dropped. He noticed about a week later that it had been partly dismantled. This evidence is not consistent with Mr Ghandour’s, and is consistent with the expert evidence. It also stands in contrast to the opinion formed by another employee (Dean Christoper Janovich, at p 98, Ex B) who said that he expressed the view to Mr Ghandour that the scooter was stolen about 2 weeks before the police search.

(2) Mr Alfar’s Individual Licence

33 The following particular circumstances where drawn to attention at hearing.

34 Circumstance 1: Presence on premises of suspect vehicle, Mitsubishi Magna.

35 The search at Jade Automotives lead to the seizure of a Mitsubishi Magna, WAD 658. The police material (pp 105-106, Ex B, file 023175) contains a statement by an expert police examiner, Sen Const B J Williams (headed Certificate of Expert Evidence, Section 177, Evidence Act 1995) as to attributes of this vehicle. He noted that the vehicle head had been removed and was in a state of being repaired. He was unable to locate the Vehicle Identification Number (VIN) plate on the driverside of the firewall, the manufacturer’s location. He was unable to find any visible signs of a VIN. His opinion was that the VIN had been removed from the firewall. He said that the compliance plate and the identification plate have been removed and replaced at some stage also. He expressed the opinion that these irregularities should have been picked up during the roadworthy process of registering the vehicle.

36 Circumstance 2: Mr Alfar’s connection with Rizen Smash Repairs.

37 This matter does not require elaboration at this point. Mr Alfar was a co-director of Rizen Smash Repairs. At least at law, he is responsible for the conduct and operation of that business.

Assessment

38 The degree of satisfaction that an administrator (and the Tribunal on review) needs to possess in order to form the opinion that there are ‘reasonable grounds’ to ‘believe’ that factors specified by statute are present in a particular situation is not an onerous or high one.

39 This issue was considered by the Tribunal in Washington Gray Pty Ltd & Gough -v- Director General, Department of Fair Trading [2001] NSWADT 209 at [15]. It said:

‘Even though the holding of the belief is an "objective requirement" ( Hempel v Moore (1986) 70 ALR 551 at 609-610) the belief is not one which must be held with certainty, or even on the balance of probabilities. In George v Rockett and Anor ((1990) 170 CLR 104 at 116) Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ explained the distinction between reasonable grounds to believe and establishment on the balance of probabilities adding that:

. . . the assent of belief is given on more slender evidence than proof. Belief is an inclination of the mind towards assenting to, rather than rejecting, a proposition and the grounds which can reasonably induce that inclination of the mind may, depending on the circumstances, leave something to surmise or conjecture.’’

40 There must, as I see it, be rational and persuasive evidence for the formation of the belief. The power being exercised in this case is one of the utmost seriousness – it brings a business to an end, peremptorily and without the need for any prior notice or warning. For the operators of the business, and its employees, it will often have the effect of depriving them of their likelihood. They are provided with no opportunity to adjust their financial commitments, commitments which may be substantial – commercial lease payments, uncompleted jobs, trade debts. It is a crushing blow.

41 The Government and the Parliament saw it as a step to be taken in circumstances where the pursuit of disciplinary action, by way of notice to show cause, the production of evidence and the conduct of a disciplinary hearing, would not provide a sufficient protection of the public interest in relation to alleged misconduct on the part of the licensee. The Minister referred, when introducing s 64A into Parliament, to the delays that can surround the resolution of show cause proceedings and the risk to consumers and the public generally that the licensees may continue to engage in the suspected misconduct. The Minister said: ‘As a safeguard, the power to impose a suspension will only be exerciseable by the Director General and cannot be delegated. It will also only be used where it is considered that other measures available to the Department, such as obtaining from the trader an enforceable undertaking not to further engage in the improper conduct, will not protect consumers from significant loss or damage.’ (Fair Trading (Enforcement and Compliance Powers) Bill, Hansard, LA, 7038 (9 June 2000).

42 The three question posed by s 64A are whether there are reasonable grounds to believe that: (a) the conduct constitutes grounds for suspension or cancellation of the licence under the relevant legislation; (b) it is likely that the licensee will continue to engage in that conduct, and (c) there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently.

43 As to (a), the relevant legislation is the MVRA. The grounds for disciplinary action against a licensee are set out in s 42(1). Some of them relate to the satisfactoriness of the licensee’s business in terms of material, manpower and financial resources. Others relate to the personal integrity of the licensee, for example ground (a) (misleading application), (b) (conviction for offence of fraud or dishonesty), (c) (guilty fraudulent conduct or dishonesty in connection with business); and (h) (carrying on business in a dishonest or unfair manner), which is relied on in this case. It is plain also that if the criminal case against Mr Ghandour is sustained, grounds (b), (c) as well as (h) would be made out. While Mr Alfar is not the subject of criminal charges, the conduct alleged, if proven in disciplinary proceedings, would fall within ground (c) and ground (h) of s 42(1).

44 I am satisfied that the conduct alleged against both licensees (Rizen Smash Repairs and Mr Alfar) falls within ground (a) of s 64A(2). There was no contest to these conclusions at hearing on the part of the applicants.

45 As to (b) and (c), Mr Dhanji, counsel for the applicants submitted that those grounds were not satisfied. As to (b), he submitted that there was little likelihood that the applicants would continue to engage in the conduct alleged. They had been targetted by Task Force Worth. They had been the subject of covert surveillance, including telephone intercepts. In these circumstances he submitted that a reasonable belief could not be held that they would be likely to continue to engage in the conduct alleged.

46 It followed from that proposition that criterion (c) could not be made out, as there could then be no danger that any significant harm would be done to the community. Counsel for the Director General, Mr Wilson, submitted that their propensity to continue to engage in the course of conduct alleged against them should be assessed by reference, in particular, to the police material.

47 His submission is that their lack of candour and frankness to date in dealing with police enquiries points towards a dishonest state of mind. Mr Dhanji replied that this submission, if given weight by the Tribunal, would place at risk his client’s right of silence.

48 In my view the following matters count heavily against Mr Ghandour on the material as it presently stands:

The presentation on the same day of the same car for quotes arising from two separate collisions, and his preparedness to issue quotes without questioning the bona fides of the persons asking for the quotes.

The extent of the communications with Mr Ghandour in relation to the quote for the car AJD38A, including the material suggesting that Mr Ghandour was prepared to increase the quote. It is the case that the intercepts suggest that ultimately he was not happy with the situation he found himself him, and was seeking to withdraw from the job.

The discovery of a stolen motor scooter at his premises in an advanced state of dismantlement, when Mr Ghandour said that it was simply presented with a cracked plastic cover. His inability to give a clear explanation as to the missing ignition keys. The expert evidence that the scooter’s identification signs had been obliterated.

His assertion in his affidavit for these proceedings (Ex D, file 023175) that the usual practice is for insurers to send payments direct to the owner, and it is for the owner to pay out the panel beater. The material discloses (pp 90-91, Ex B, file 023175) that in the case of the Toyota Camry VVN 700 the payment was made direct to Mr Ghandour.

The lack of any adequate explanations, at this point, in relation to the above matters.

49 The Tribunal should not, as I see it, adopt an uncritical view of a failure to give adequate explanations in circumstances like these. The ‘right of silence’ and the privilege against self incrimination are important components of the criminal justice system. Mr Ghandour is, understandably, obtaining advice as to the position he finds himself in, and the extent to which he should respond to the allegations against him. But this Tribunal’s jurisdiction does not operate by reference to the principles of the criminal law.

50 The Director General has responsibility for the administration of a licensing system under which persons may only lawfully practise certain occupations and businesses after being approved to do so. It is clear that licence holders must be of good character and be otherwise qualified. Licensees must, I consider, co-operate with the regulatory system if it is to work efficiently and in the public interest.

51 That means being candid as to matters raised (ordinarily by inspectors of the Department) in relation to matters of conduct that have given rise to questions which are connected with the use of their licence. In this instance because of the seriousness of the matters under investigation, the applicants did not have initial contact with the inspectors but with the police. I do not see that as a significant distinction in the end. The regulatory authority is entitled to take account of the lack of candour for its purposes regardless of whether the first contact is made by its inspectors or the police.

52 While under the criminal law defendants are entitled to call on the prosecution to establish the case against them without giving evidence in reply, it does not follow, that for the purposes of ascertaining what the correct and preferable decision is in relation to their licences, no adverse view can be formed by the regulatory authority as to that omission.

53 In these circumstances, the Tribunal can, I consider, form an adverse view. There is no sensible explanation on the part of Mr Ghandour as to such matters as the double quote, the agreement to give an inflated quote and the motor scooter being in a dismantled condition.

54 These matters relevantly bear on the trust that can be placed in him not to engage in suspicious conduct again, and to bring to the attention of the authorities (police and licensing inspectors) at the first instance any suspicious claims or vehicles.

55 Mr Dhanji’s appearance was on behalf of both applicants, with the difficulties that that can entail when the cases made against the two are not identical. He did seek to differentiate the situation of Rizen Smash Repairs and Mr Ghandour on the one hand from, on the other, the situation of Mr Alfar and the business of Jade Automotives. He said that an explanation had been offered by Mr Alfar as to the presence on the premises of a suspicious vehicle, the Mitsubishi Magna. The explanation appears in para 11 of Mr Alfar’s affidavit (Ex C in file 023175). There he states that he had checked the ownership of the Magna, and it belonged to the wife of an employee, a Mrs Zomaya. This accords with the police advice.

56 I agree with Mr Dhanji that this explanation should be accepted and given weight by the Tribunal in a situation where no countervailing evidence has been produced by the Director General; and that it militates against an inference that it was a stolen vehicle. On the other hand the police have asserted in their advice to the Director General that they suspect the bona fides of the employees of Jade Automotives. There has not in these proceedings been produced any evidence in support of that statement. Nonetheless it retains some value for present purposes, as the preliminary assessment of a major criminal investigation. It would be necessary to look behind Mrs Zomaya’s alleged ownership before reaching any final conclusion as to the antecedents of the Magna. More significantly, the expert evidence is that the Magna’s indentifying signs have been tampered with or removed. This evidence supports the conclusion that the vehicle is a suspect one, and that the signs giving rise to suspicion are ones that would be readily observable by a mechanic of Mr Alfar’s experience. The evidence as to ownership given by Mr Alfar does not dispose of the concern relating to the Magna, giving rise to the Director General’s action.

57 The Director General also points to Mr Alfar’s involvement in the business of Rizen Smash Repairs. He submits in effect that Mr Alfar must also bear responsibility for any misconduct that has occurred at Rizen of which he is part-owner and co-director, Against that, Mr Dhanji submitted that Mr Alfar’s involvement in Rizen was minimal. He worked during the day at Jade, and was merely a financial partner in Rizen with Mr Ghandour running the business. In response the Director General noted that one of the employees of Rizen (Kel Joseph Taylor, first statement, p 52 of Ex B, file 023175 ) had stated to police that Mr Alfar was usually present at Rizen each morning. This pointed to more than a mere financial involvement.

58 In my view it is inherently improbable (as I observed on 12 August 2002 in response to the stay application) that Mr Alfar would be as disengaged from the business of Rizen Smash Repairs as has been suggested. He had just taken a half share in the business. The business was a very small one (Mr Ghandour and two employees), as was Mr Alfar’s business, Jade Automotives. While they operated in different parts of the motor repair spectrum (panel beating and smash repairs as compared to mechanical repairs), it is likely that they would seek to construct a relationship between the two businesses, and provide a comprehensive service, wherever possible, for cars with panel and mechanical repair needs. Even if no particular weight is given to the synopsis of interview with Mr Ghandour in relation to whether he had a criminal intent in respect of the scooter (as was put to me by Mr Dhanji), Mr Ghandour’s answers do point to a close working relationship between him and Mr Alfar, which extended to Mr Alfar’s son. I note also that the list of seized items from Mr Ghandour’s premises records (item 12) ‘one invoice book for Jade Auto Repairs’. These factors weigh against making any differentiation in favour of Mr Alfar in respect of the Jade Automotives business.

59 Mr Dhanji submitted that this was not a case where the misconduct alleged had occurred over a long period of time. Where that was the case, he said it would be possible to form the view that the licensee ‘will continue to engage in that conduct’ (criterion (b)). Here there was only a handful of suspicious events. They had been exposed. The applicants had learnt of the degree of surveillance they were under. In these circumstances it is highly unlikely that they would repeat the conduct alleged against them. There is, in my view, some force in this submission.

60 Nonetheless, I have difficulties in forming a view negative to the Director General on the issue of future conduct. There is force also in the counter-submission of Mr Wilson that the occurrence of these suspicious events so soon after becoming connected with the business of Rizen Smash Repairs would tend to suggest a propensity for engaging in such conduct; and that it was an ordinary part of the business. The matters on which the police rely all relate to the first three weeks of Messrs Ghandour and Alfar’s involvement in the business.

61 As to this point, Mr Dhanji seeks to draw a distinction between the period to 2 June, the date of sale of the business to Ghandour and Alfar, and the period since. He notes that the matters relied upon, apart from the police intercept material, belong to the earlier period. I do not regard the point as significant. It is in my view inherently probable that Mr Ghandour joined the business on 17 May 2002 with a view to taking it over. He is likely to have had substantial operating authority in a small business where he was the prospective purchaser. In any case they are both listed as co-directors in the licence issued on 17 May 2002.

62 To some extent criteria (b) and (c) will run together. A person who is thought ‘likely to engage’ in the conduct in issue, would also be likely, one would ordinarily think, to present the ‘danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently’ (criterion (c)).

63 As to (c), there are several elements that need to be demonstrated. In Washington Gray Pty Ltd & Gough -v- Director General, Department of Fair Trading [2001] NSWADT 209 the Tribunal was not satisfied that they were made out. The elements are: a ‘danger’ that a person or persons may suffer ‘significant’ harm, or significant loss or damage, ‘as a result of’ that conduct ‘unless action is taken urgently’.

64 This criterion represents an attempt to ensure that the sanction of suspension is reserved for the very worst cases of suspected infraction of the disciplinary standards. In this instance my conclusion as to (c) substantially depends on my conclusion as to (b).

65 The Director General’s submission in relation to criterion (c) is that the need for urgent action arises from the possibility of fraudulent pay-outs for car repairs, and the consequences for premiums. That is a reference, as I see it, to the public interest that the Task Force’s investigations are, as a whole, seeking to uphold. At the hearing of another stay application on 12 August 2002 the scale of car theft in Australia was said by the Director General to be $1billion per annum, in New South Wales $388m with rebirthing comprising $156m. (See also Second Reading Speech, Attorney General, Crimes Amendment (Gang and Vehicle Related Offenders) Bill 2001, Hansard, LA (17 October 2001).) These figures can not be used to form a view as to the approach to be taken to these licences. The particular circumstances relied upon directly relevant to these licensees must set the scope of the inquiry; as Mr Wilson’s submissions recognised.

66 Clearly if the licensees were to engage in conduct in the future of the kind of which they are suspected in these cases a number of persons would suffer significant harm. Owners are at risk if there is a profitable trade to be had in altering the identity of cars. Insurers are at risk if staged collisions occur. In turn consumers pay higher premiums. Purchasers of bogus vehicles are at risk. The legitimate trade in used cars is undermined. The export trade in new and used cars is undermined.

67 I raised in the proceedings the possibility that the applicants might be allowed to have their licences back on conditions. These conditions could be so constructed as to address concerns that the alleged conduct might recur (consideration (b)) and that financial harm might be inflicted (consideration (c)). This could be done through strict reporting controls, and possibly limitations on undertaking certain classes of work. That would allow them to trade pending the outcome of any criminal proceedings (in the case of Mr Ghandour) or disciplinary proceedings (both applicants), keep the assets that the businesses represent intact, and provide work to the employees.

68 I had not been aware at that time I put these questions to Mr Wilson of the statement in the second reading speech quoted earlier in these reasons. The Minister made it clear that notices of suspension would only be used ‘where it is considered that the other measures available to the department, such as obtaining from the trader an enforceable undertaking not to further engage in the improper conduct, will not protect consumers from significant loss or damage.’ There was no evidence of what steps had been taken by the Director General in that regard. There was no evidence of any contact between Departmental inspectors and the applicants other than by way of service of the notices.

69 As to the Tribunal imposing conditions, Mr Wilson submitted that the Tribunal’s jurisdiction was simply to review the decision to suspend. Either it was set aside or it stood unqualified. It was not open under s 64A to substitute another decision. It was said that this point was considered in Washington Gray Pty Ltd & Gough -v- Director General, Department of Fair Trading [2001] NSWADT 209. In the short time available I have not been able to locate any reference to it, though there is to a different kind of argument as to the scope and operation of s 64A(2). I will not seek to resolve this issue on this occasion.

70 The question that has to be addressed in relation to criterion (c), as was recognised in Washington Gray Pty Ltd & Gough, is whether there is an imminent danger of significant harm to third parties if the licensees are permitted to continue to trade pending determination of the disciplinary proceedings. There must be some assessment of the degree of risk. In that case a major builder of many years standing had been suspended pending disciplinary proceedings. There had been a large number of complaints over the years, but they did not represent a significant number when compared to the number of jobs completed without complaint. There had been a low rate of complaint in recent years. These factors militated, in the Tribunal’s view, against the need for action beyond the usual pursuit of show cause proceedings. The Tribunal distinguished another decision, Tropea v Director General, Department of Fair Trading [2001] NSWADT 158 where it did find the ‘urgency’ ground made out. It observed that in that case there had been a high number of recent complaints, and that there was a need to ‘avoid any continuation of dishonest or fraudulent conduct’. In Washington Gray & Gough, the Tribunal expressed the view that the problems that had caused the Department to act (defective work) could be addressed through imposition of conditions pending determination of the disciplinary proceedings. There was no allegation in that case that the licensees engaged in deceitful conduct. The Tribunal also took into account the there were eight contracts on foot with purchasers of homes, in various stages of completion.

71 On this occasion, I am satisfied that criterion (c) is made out because of the number of suspicious events that Mr Ghandour and Mr Alfar have jointly or individually been associated with in the short time that they had been in business as Rizen Smash Repairs, and within the limited time span of the close surveillance. This material points to a pattern of activity that may well involve a significant proportion of their businesses, as compared to the position in Worthington Gray & Gough. Importantly, somewhat like Tropea, there is an absence of any credible explanations for these suspicious events, giving rise to issues of honesty and candour. That leads me to conclude that there remains a danger of significant harm to third parties to which this form of urgent response is appropriate.

COSTS OF ADJOURNMENT

72 The applicants have applied for costs of the adjournment that occurred on 3 September 2002. The original hearing, seeking a stay of the suspension pending determination of the application for review of the suspension was, occurred on 12 August 2002, eleven days after the notices were served. The application for a stay pending determination was refused. Suspensions are limited to a period of 60 days, but may be renewed. The current suspension expires on or about 29 September 2002. It follows that the final hearing in respect of the application for review should be brought on quickly. Otherwise the vice may occur of the period of suspension running for most of its term before the review applicants practically exercise the right of external review given to them by s 64A(8), FTA.

73 To that end the Tribunal has adopted procedures, following consultation with the Department of Fair Trading, which seek to ensure informed but timely dealing with these matters. Procedures initially adopted on a case-by-case basis have now been formalised in the form of the Practice Note 9 issued on 15 July 2002. The procedures seek to ensure a turnaround of about 21 days from lodgment of the application for review, and recognise that the first step that the suspended persons may seek to take is to apply for an urgent stay of the decision to suspend pending hearing.

74 The Director General was unable to comply with the standard directions set down by the Practice Note, which were adopted in these cases. Instead of serving the material upon which he proposed to rely within 7 days of the date of the application (11 August 2002), that did not occur until the morning of the hearing, 3 September 2002. As a result, at 10 am when the hearing was due to commence, counsel for the applicants applied for an adjournment, which was not opposed. Counsel referred to the difficulty in assimilating the material (now Ex B in each of the two files) in the short time available and obtaining instructions from their clients. There was consideration of whether the matter should be stood down until 2 pm. He referred to the time-table which had contemplated that they would have seven days to put on any material in reply. The application for adjournment was granted. The applicants applied for costs of the adjournment.

75 In effect, the basic rule in proceedings in the Tribunal is that each party bears their own costs. There are some exceptions, not relevant to these proceedings. The rule is contained in s 88(1), and is expressed in these terms:

‘Subject to any rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to any proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs.’

76 The Tribunal at Divisional level and at Appeal Panel level has dealt in several decisions in its various jurisdictions with what might constitute ‘special circumstances’ justifying an award of costs. It has commended as a useful guide the list of factors set down in the legislation governing the equivalent Victorian Tribunal which works with an equivalent rule, Victorian Civil and Administrative Tribunal Act1998, s 109. Various factors are listed, one of which deals at length with the costs of adjournment, factor (a), as follows (s 109(3)(a)):

‘The Tribunal may make an order under sub-section (2) only if satisfied that it is fair to do so, having regard to- (a) whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as- (i) failing to comply with an order or direction of the Tribunal without reasonable excuse; (ii) failing to comply with this Act, the regulations, the rulesor an enabling enactment (iii) asking for an adjournment as a result of (i) or (ii); (iv) causing an adjournment;…’.

77 One of the problems that has plagued ‘no costs’ tribunal jurisdictions, in my experience, has been the burden imposed on the innocent party by the defaulting party in respect of non-compliance with directions; and the occurrence of adjournments because the innocent party is as a result not ready to proceed on the original listed date. Notably that is the very first problem with which the Victorian guidelines deal.

78 In submissions on this matter, Mr Wilson for the Director General focused on the words ‘without reasonable excuse’ in (a)(i) above. He stated that the Director General was dependent on the police material. The Task Force had been engaged in a major investigation, as a result of which several licences were suspended. It had prepared and organised the material for use in these proceedings as quickly as it could have in the circumstances. He said that because of the large number of items seized from a variety of premises, the police automotive experts had to complete a number of expert statements. He noted that the ones relevant to this case (to do with the motor scooter and the Mitsubishi Magna) had been done on 2 September 2002, and had been served as soon as possible after that.

79 The fact remains that the applicants had engaged legal representation. The original timetable which gave rise to the date of 3 September 2002 had taken account of the availability of their preferred legal representation. The matters are serious ones. The applicants needed the assistance of interpreters.

80 There was no indication from Mr Wilson that any communication had flowed from the Department when it became clear that there would be a delay so that an adjustment to the time-table could possibly be agreed between the parties, and legal costs avoided.

81 Strict adherence to the directions time-table is fundamental to achieving fairness towards review applicants under suspension. Ordinarily the present difficulty would not arise as the full material would normally be in place at the time the notice is issued. In this case, it would appear that all the Director General had by way of written material was the police letter of 30 July 2002, sent the day before the co-ordinated searches and arrests. A case where the initial detection of suspected misconduct is made by the police and suspensions immediately follow will require additional effort. A priority may need to be given by the Department to getting the material together beyond that which occurred in this case.

82 If it is known that there is likely to be a failure to adhere to the time-table that should be notified at the first opportunity. That notification should, I consider, occur no later than the day before the due date for compliance with the relevant direction. If necessary, the Tribunal can convene a telephone hearing to deal with any difficulty. Undue delay on the part of the Department may itself in appropriate cases be a factor which might lead to the reopening of the question of whether a stay of the suspension should be granted pending final determination.

83 In these circumstances the Director General should, I consider, meet the applicants’ costs of the adjournment.

ORDER

1. Decisions under review affirmed.

2. The respondent pay the applicants’ costs of the adjournment on 3 September 2002.