Trlin v Department of Fair Trading

[1999] NSWADT 72

CITATION:	Trlin -v- Department of Fair Trading [1999] NSWADT 72
DIVISION:	General
APPLICANT:	John Trlin
RESPONDENT:	Department of Fair Trading
FILE NUMBER:	993100
HEARING DATES:	08/18/1999
SUBMISSIONS CLOSED:	08/18/1999
DATE OF DECISION:	31 August 1999
BEFORE:	G Fleming - Judicial Member
PRIMARY LEGISLATION:	Motor Dealers Act 1974
APPLICATION:	Review of decision to refuse to grant a motor dealers licence -
MATTER FOR DECISION:	Principal Matter
REPRESENTATION:	Applicant: in person Respondent: C Lonergan of counsel
ORDERS:	1. The Tribunal affirms the decision under review.

THE APPLICATION

1 This is an application by John Trlin (‘the Applicant’) for review of the decision of the Director General, Department of Fair Trading (‘the Respondent’), to refuse to grant him a motor dealers licence pursuant to the Motor Dealers Act 1974 (‘the Act’).

2 The original application for the licence was made on 25 May 1998. The decision to refuse to grant the licence was made by the Respondent’s delegate on 14 December 1998. The Applicant sought internal review of this decision and on 23 April 1999 the decision was affirmed. The Applicant applied to this Tribunal for review on 21 May 1999.

THE RELEVANT LAW

3 The grant or refusal of a motor dealer’s licence is a matter for decision by the Respondent pursuant to Part 2 of the Act. Section 20F of the Act provides that a person who has been refused a licence may apply to the Administrative Decisions Tribunal for a review of that decision. The decision is a ‘reviewable decision’ having been subject to internal review pursuant to section 53 of the Administrative Decisions Tribunal Act 1997.

4 Section 12 of the Act sets out the circumstances in which the Director General must refuse to grant a motor dealers licence. Mr Trlin’s application was refused on the basis that he failed to meet the requirements of Section 12(2) of the Act which provides, where relevant, as follows;

An application for a licence made by a natural person shall be refused if it appears to the Director-General that:

(f) the Applicant is not a person likely to carry on such a business honestly and fairly.

. . .

(g) the Applicant is in any other way not a fit and proper person to be the holder of a licence.

5 The expression ‘fit and proper person’ in the context of the issuing of a motor dealers licence has not previously been considered by this Tribunal. In the matter of Haining v Commissioner of Police, NSW Police Service [1999] NSWADT 6 at [41] the President of this Tribunal made the following comments on the issue, in the context of the security industry;

"Whether a person is "fit and proper" to hold a licence in a regulated industry will be affected by general considerations relating to the character of the person, special considerations that take account of the nature of the industry in issue and the public policy objectives leading the legislature to regulate the industry."

6 In Haining the President also referred to the comments of Mason CJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321. The finding of whether a person is ‘fit and proper’ is “one of value judgement. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness or propriety are under consideration.” Mason CJ referred to the breadth of the concept of ‘fit and proper’ and the need to have regard to the particular social importance of the industry which was being regulated.

EVIDENCE

7 The Tribunal had in evidence before it the relevant documents provided by the Respondent pursuant to section 58 of the Administrative Decisions Tribunal Act 1997. These are in the form of a copy of the Department of Fair Trading’s licensing file in relation to the Applicant. Exemptions have been claimed under the Freedom of Information Act 1989 in relation to some documents. The Tribunal held a hearing in this matter on 18 August 1999 and the Applicant attended and gave evidence. He was assisted by a friend Mr Roach Mr Brian Daley gave evidence in support of Mr Trlin’s application. The Respondent was represented by counsel and his legal officer.

8 The evidence upon which the Respondent made the decision is set out in point form in the Statement of Reasons of the Delegate who conducted the internal review. This provides, in part, as follows;

• The Applicant, having certified that particulars specified in the application and all attachments, to the best of his knowledge, are true and correct in every detail, failed to disclose certain particulars. Evidenced by Part 1 of the Application showing the answer box for “No” marked with and “X” for each of the following questions:
  Has any individual Applicant, Director, Manager, Partner or Corporation nominated in this application, either in NSW or elsewhere:

  A. previously applied for an authorisation, whether it be described as a licence or certificate of registration under any act relating to the regulation of any business trade or profession?

  B. had any application withdrawn refused , or a licence cancelled?

  C. had any licence granted which is no longer in force?

  D. been investigated ( or being investigated ) which may result in disciplinary action?

  H. been known by any other name?

  I. had their estate assigned for the benefit of creditors or been declared bankrupt?

• The Applicant applied for a Motor Dealers licence in Queensland in 1987.
• The Applicant applied for a second-hand dealers licence(App No 29906) on June 1997.
• The Applicant was a director of 4 companies which, in 1986 entered into a Deed of Undertakings under s20J of the Act, with the then Commissioner for Consumer Affairs, in relation to their conduct as licensed motor dealers.
• The Applicant, as a Director of John L Pty Ltd, was disqualified from holding a licence or being concerned in the direction, management or conduct of a business for the carrying on of which a licence is required under the Act for a period of 5 years from 14 January 1987 as evidenced by a letter dated 30 December 1986 to the Applicant form the then Commissioner for Consumer Affairs. Subsequently, the Commercial Tribunal of New South Wales at Sydney dismissed an appeal by the Applicant against the then Commissioner’s decision to cancel the applicant’s licence. The orders cancelling the motor dealers licence and disqualifying the Applicant took effect on the 17 March 1987.
• The Applicant was a director of 3 companies ( Trueline Motors Pty Led, Galaxy Motors Pty Led and Lease Acceptance Pty Ltd) whose licenses were cancelled under the Act; and were required to surrender licenses as a consequences of failing to comply with requirements of the Act.
• The Applicant was a declared bankrupt from 1991-1994.
• The Applicant was prosecuted in 1996 for carrying on business as a motor dealer without being the holder of a motor dealers licence. This matter was found to have been proved but did not proceed to conviction pursuant to s556A of the Crimes Act.
• Information is available to this Department that indicates, that between 1994 and 1998 the Applicant carried on business without being the holder of a motor dealers licence. A Roads & Traffic Authority Extract shows that 34 vehicles were disposed of in the name of the Applicant in that period.
• The Applicant has been known by, or allowed himself to be know by other names. This is evidenced by the application for a second-hand dealers licence (App No. 29906) on 13 June 1997 in the name of John Luke Trlin. The application for the full dealers licence in the name of John Trlin. The application has been known as John Louis Trlin as a director of the 4 previously mentioned companies as evidenced by an extract from the Departments Business Licensing System used for maintaining a register of licences under the Motor Dealers Act 1974. The Applicant was a declared bankrupt from 1991-1994 in the name of John Louis Trlin. The Departmental report indicates associated use of the names John David Prlin and David John Trlin.

7 The Applicant lodged detailed written submissions with the Tribunal. These submissions may be summarised as follows;

• On 17 March 1986 the Applicant was disqualified from holding a motor dealers licence for a period of five years. He was not disqualified permanently, which was an option to the Commissioner at that time. To continue to refuse him a licence is to effectively impose a permanent disqualification.
• His disqualification occurred at a time of personal trauma for him. He lost his family and many of his business interests during that period. These losses also contributed to his bankruptcy.
• He has extensive experience and expertise in the motor vehicle industry and is aware of the legislation and the obligations of a licensee. He is an active member of the community. He is a Justice of the Peace, is involved in community associations and sporting groups. He has submitted a number of personal references as to his good character and his expertise in the motor dealing industry.
• In relation to the allegation that he made errors on his application form Mr Trlin admits to some errors and denies others. He denies any attempt to deceived the Respondent and states that at all times he was dealing with an officer of the Department of Fair Trading who knew him and knew of his background. Specifically in relation to each of the errors in the application form cited by the Respondent, he replies as follows;
  he failed to answer Part 1A correctly as he had forgotten that he had applied for a motor dealers licence in Queensland in 1987. He had not pursued the application and had decided to concentrated on other business interests.

  part 1D asked for information within the last ten years and he answered correctly given that his disqualification occurred more than twelve years ago.

  he provided a copy of his Second Hand Dealers and Collectors licence, granted in 1995, as an attachment to his application and thus his failure to disclose this in answer to question A of Part 1 was not intended to deceive.

  He does not consider that the application form required the disclosure of the Deed of Undertaking entered into by him in 1986 in relation to four companies of which he was a Director.

  He stated in answer to Section J of the application form (which was an attachment to the form) that was a director of John L Pty Ltd , Trueline Motors Pty Ltd, Galaxy Motors Pty Ltd and Lease Acceptance Pty Ltd and had previously held licences 2, 3, 4, 5, and 6. This referred to a list on the front of the form being Trailer, Motor Cycle, Commercial Vehicle, Caravan and Auto Dismantlers licences respectively. While this contradicted his previous answers at Part I C, it evidenced that he did not intend to deceive the Respondent.

  He failed to declare on the form that he had been declared bankrupt in 1991 but had attached a copy of the certificate of discharge which indicated that he did not intend to deceive the Respondent about this.

  He was prosecuted in 1996 for carrying on a business without a licence but did not disclose this in answer to any question on the application form because he did not think that he was required to. His case was dealt with under section 556A (of the Crimes Act) and this was equal to being found ‘not guilty’.

• Mr Trlin admits to the sale of some 34 vehicles from 1994-1998 however he states that these vehicles were surplus to his business and he did not require a licence to sell them.
• He denies the use of other names. He states that as he has an unusual name it is often not recorded or pronounced correctly by others. He has a son David Trlin who runs his own business from the family home in Kellyville where he has lived for over forty years.

8 The Applicant operated as a motor dealer from 1955 to 1986. He is now nearly sixty three years of age. He was the Director of John L Pty Ltd, Trueline Motors Pty Ltd and Galaxy Motors Pty Ltd. These companies traded under the business name of John L and held motor dealers licences to do so. On 2 June 1996 the Applicant, in his capacity as a Director of the above companies entered into a Deed of Undertaking with the Commissioner of Consumer Affairs ( this office is now held by the Respondent). That Deed, which is before the Tribunal, stated that it appeared to the Commissioner that the companies had ‘repeatedly engaged in unjust conduct’ in the form of conduct which was ‘dishonest or unfair’ and which were in breach of the Motor Dealers Act and the Consumer Protection Act. The Deed was executed at the Commissioner’s request and required the companies to undertake to discontinue this conduct and to comply with specified directions in relation to the sale of motor vehicles. The undertakings made in the deed were stated to be in no way an admission by the Applicant of breaches of the Motor Dealers, Consumer Protection or Credit Acts.

9 Mr Trlin gave oral evidence at the hearing. His oral evidence at times contradicted the evidence set out above. In summary he told the Tribunal as follows;

He did not complete the Application form himself. He asked a friend, named Alex, whose surname he is not sure of, to help him. The form was completed by Alex in part by Mr Trlin instructing him over the phone as to how to answer and in part by Mr Trlin speaking to him in person. The form was completed over a period of time. Other friends and family members also assisted in compiling documents to attach to the form.

He is not good at filling out forms or paperwork as he is always rushing around. He believed that as departmental officers knew him they would contact him if there was anything wrong. He described himself as ‘slack’ in his approach to completing the application form. He has a record keeping system but he sometimes loses records. He keeps a lot of information ‘in his head’. He did not look up his records when completing the form.

He acknowledges the errors on the form including, in particular, providing incorrect answers to the questions in Part I. He acknowledges that answers on the form were in some cases contradicted by the documents which he provided as attachments.

Mr Trlin told the Tribunal that he does not believe he should have been disqualified from holding a licence in 1986 as he was not doing anything which warranted the disqualification. Nor does he accept that he was carrying on business as a motor dealer in 1996, an offence which was found proven in the local court. He believes that, in both cases, had he been given an opportunity to explain his activities to the Department then they may not have aken action against him.

He has sold a number of cars but they are surplus to his rental business. He does not believe he needs a licence for this activity although he is buying, panel beating, repairing and selling the cars.

Mr Trlin stated that the referees which he gave in support of his application for the licence had not been told by him of the fact of his bankruptcy.

He reiterated that he had no intention to deceive the Department and believed that as they knew him all the relevant information would be before them in one way or another.

FINDINGS

10 The Tribunal has carefully considered the evidence in this matter. It is for the Applicant to make out his entitlement to the grant of the licence. It is for him to satisfy the Tribunal on the weight of the evidence that he can meet the legislative requirements for the licence to be granted. The Tribunal has considered the two grounds upon which the original decision was made to refuse to grant the licence. They are firstly that the Applicant is not likely to carry on the business of motor dealing honestly and fairly, and secondly, that he is in any other way not a ‘fit and proper’ person to be the holder of the licence. Failure to meet either of these criteria would mean that the licence must be refused. The Tribunal has considered these grounds separately however the evidence is obviously common to both. There are certain factual matters upon which there is no dispute and it is convenient to clarify these matters out at the outset.

11 The following findings are not disputed. The Applicant operated as a motor dealer from 1955 to 1986 as a director of John L Pty Ltd, Trueline Motors Pty Ltd and Galaxy Motors Pty Ltd. These companies were the subject of investigations and disciplinary proceedings by the, then, Commissioner of Consumer Affairs, in 1986. As a result of those investigations the companies entered a Deed of Undertaking in relation to the conduct of licensed activities under the Motor Dealers Act 1974. On 14 January 1986 the Motor Dealers Licenses held by those companies were cancelled and the Applicant, as a director of those companies, was disqualified from holding a licence for a period of five years from that date. This decision was upheld by the Commercial Tribunal of NSW and the disqualification became effective from 17 March 1986. The Applicant was declared bankrupt on 29 October 1991 and was discharged on 30 October 1994. In 1996 the Applicant was prosecuted for carrying on a business as a motor dealer without a licence. The Local Court found the case proven but dismissed it pursuant to section 556A of the Crimes Act. Mr Trlin was required to enter a good behaviour bond for twelve months with a self surety of $1000. The Applicant is a Justice of the Peace and is active in community affairs. He has other business interests outside of the motor vehicle industry and he was the holder of a Second-Hand Dealers licence in NSW from 1995-96. He has lived in Kellyville for over forty years. He currently conducts a business of leasing motor vehicles.

12 There are a number of matters, set out above, which have been relied upon by the Respondent as grounds for refusing the licence. They are, in summary, the failure of the Applicant to be truthful and frank on the application form, the Applicant’s bankruptcy, the Applicants conduct in carrying on the business of motor dealing without a licence for which he was prosecuted in 1996, the conduct of the Applicant in the disposal of vehicles without a licence from 1994-1998, and the allegation that the Applicant has used other names in order to gain some benefit or to hide from his past conduct.

13 There are two matters which the Tribunal can deal with briefly. The Tribunal is not satisfied on the evidence before it that the Applicant has deliberately or inadvertently used other names. The Tribunal accepts that the Applicant has a name which is susceptible to misspelling and mispronunciation and that this may have been the cause of discrepancies. The Tribunal also notes that the Applicant has a son, David, and that he and his father may have been confused in some cases. Reference was made in the hearing to evidence in relation to this issue in the Local Court proceedings. However these matters were not pursued before the Tribunal.

14 Secondly, the Tribunal has considered the allegation that in the sale of some thirty four vehicles in recent years Mr Trlin has been operating as a motor dealer without a licence. Of these thirty four cars, it seems that at least fourteen of the sales were the subject of the Local Court proceedings. In relation to the remainder Mr Trlin maintains that he has simply been selling vehicles which are excess to his leasing business. He told the Tribunal that he has obtained advice that this activity does not require a licence. The Respondent has the option of taking action against Mr Trlin in the Local Court in relation to these activities (as he has previously) but has not done so. The Tribunal is of the view that, on balance, there is insufficient evidence to suggest that these activities, to the extent that they are beyond the Local Court proceedings, should be held against Mr Trlin in the consideration of this licence application.

15 It is not for the Tribunal in this matter to review the merits of the disqualification placed on Mr Trlin in 1986. However the fact of this disqualification is relevant to both of the current grounds of refusal to issue the licence, as are the findings of the Commissioner on which it was based. The evidence is that the Commissioner was satisfied that the Applicant (who was the dealer), inter alia, failed to keep a dealers register of vehicles acquired for sale or consignment, failed to keep a register of prescribed particulars, failed to keep appropriate trust accounts and carried on business to which the licence related in an unfair manner in connection with renegotiating agreements with owners.

16 Similarly it is not for the Tribunal to redetermine the decision of the Local Court in relation to the prosecution of Mr Trlin for dealing with motor vehicles without a licence. It is relevant that the Court found the matters proven, although did not record a conviction. The import of a Section 556A finding in relation to questions of fitness and propriety has previously been the subject of comment in the Tribunal in the matter of Haining v Commissioner of Police, NSW Police Service [1999] NSWADT. In that case the President noted that decision of the Courts not to record a conviction was, at least, a reflection that the Court was disposed to exercise its discretion in the Applicants favour. However the Tribunal is of the view that the previous disqualification and the local court proceedings are both serious matters. They are not matters unrelated to the business with which the licence is concerned. They go to the heart of conduct which the legislation is attempting to regulate.

17 It is also relevant that in relation to both the previous disqualification and the Local Court prosecution, Mr Trlin does not accept the extent of his culpability. He submitted to the Tribunal that the disqualification was harsh and unconscionable and were the result of his personal traumas at the time as well as financial and industry pressures. He considered the Section 556A finding to be ‘as good as being found ‘not guilty’ and a ‘trivial’ matter. He agreed, after questioning from the Tribunal and the Respondent, that the matter in the local court was in fact not trivial. Mr Trlin’s failure to appreciate the extent of his own responsibility in these matters suggests to the Tribunal that, were a licence to be granted, he may be not consider seriously enough his obligations under that licence.

18 Given this background it might be expected that the Applicant would be extremely cautious and careful in completing the ‘Application for a Motor Dealers Licence’ to which this decision relates. The Tribunal found Mr Trlin to be vague and contradictory in his evidence at the hearing and the Tribunal does not accept that Mr Trlin was being entirely truthful. By his own admission he was not careful in completing his application form and several significant matters were either not disclosed or not correctly stated on the form.

19 The Tribunal notes that Mr Trlin raised the fact that he was assisted by ‘Alex’ in completing the form for the first time at the Tribunal hearing. Throughout his correspondence with the Department in relation to the Application and the process of internal review he did not at any stage suggest that someone other than himself completed the form. Regardless of whether Alex or Mr Trlin actually completed the form, Mr Trlin is responsible for the truth of its contents and signed the declaration on the form to that effect.

20 The Tribunal does not accept that all the answers given by Mr Trlin in Part 1 of the form were either simple oversights or corrected by attachments to his application. Specifically Mr Trlin failed to declare his failed application for a motor dealers licence in Queensland, he failed to declare that he had previously been subject to disciplinary action in relation to companies whose licenses had ultimately been cancelled and he failed to declare that he had been prosecuted for breaches of the Motor Dealers Act 1974 in the Local Court. He did not disclose his bankruptcy in answer to a question on the form yet he attached a certificate of discharge. These are matters of the utmost importance to the grant of the licence. The Tribunal does not accept Mr Trlin’s argument that officers of the Department knew of these matters already. This does not make his errors in completing the form any less significant. It could not have been known by Mr Trlin (although it could be said to be likely) when he completed the form that he would be dealing with the same officers whom he had dealt with in the past. At best Mr Trlin exhibited, in completing the application form, a total incapacity to accurately and carefully complete it. At worst his conduct was dishonest and misleading in the way in which he completed his application form for the licence. Given the context in which this application was made and the importance of this document to Mr Trlin’s future business the Tribunal does not accept that Mr Trlin is simply incapable of filling in the form. The Tribunal finds that Mr Trlin was deliberately dishonest and misleading in the manner in which he completed the application for the licence.

21 In considering the extent to which these matters suggest that Mr Trlin is likely to carry on business honestly and fairly, or is in any other way not a fit and proper person the Tribunal has considered the statutory scheme of the Motor Dealers Act 1974 and the purpose for which the licence is held. The Motor Dealers Act 1974 sets out a scheme for the licensing of motor dealers and other related dealers. It provides for the granting of licences, requires licensees to keep certain records, imposes certain obligations on motor dealers in relation to motor vehicles offered or displayed for sale or sold by the motor dealer, sets out a dispute resolution scheme involving the Director-General of the Department of Fair Trading in relation to disputes arising in connection with the sale of motor vehicles and establishes a Motor Dealers Compensation Fund to protect consumers.

22 A vitally important part of the statutory scheme is the keeping of accurate records and registers of the sale and consignment of vehicles. Motor vehicle dealers are also expected to have high standards in relation to the keeping of trust account monies and other financial account keeping. Most customers are ordinary members of the public who often have little technical knowledge and, in purchasing a vehicle, are entering into one of their most important and expensive purchases. For this reason consumers are protected by the provisions of the Motor Dealers Act 1974 and the industry has clear provisions which guide its operation. In this context the Applicants past conduct, his conduct in wrongly completing his application for the licence and admissions in evidence before the Tribunal are significant and relevant matters. The Applicant by his own admission said that he is incapable of accurately completing forms and has difficulty with record keeping and finding relevant business documents. The Applicant in his evidence to the Tribunal appeared vague as to his business details, unable to locate relevant documents or even to understand their contents relative to the licence application and the requirements of the Motor Dealers Act. The Tribunal does not accept that Mr Trlin has the ability or capacity to comply with the detailed requirements of the Act in relation to the keeping of appropriate records and accounts.

23 The Tribunal has taken all of the above matters in to account and is of the view that the decision refusing Mr Trlin the grant of the motor dealers licence should be affirmed. The Tribunal has weighed Mr Trlin’s claims, his expertise in the industry and the evidence of his good character and contribution to community activities. The Tribunal accepts that Mr Trlin has suffered greatly from the loss of his licence and other business interests. The Tribunal has also considered that the actions for which Mr Trlin was disqualified from holding a licence, occurred over twelve years ago and that in his own words he has ‘paid the price’ of those actions.

24 Nonetheless the cumulative weight of the Tribunals findings in relation to the Applicants failure to acknowledge the extent of his responsibility for past conduct, errors in completing the current application form and motor dealing without a licence for which he was prosecuted in 1996 leads the Tribunal to conclude that the licence should not be granted. The Tribunal is of the view that Mr Trlin is not a person who is likely to carry on the business of motor dealing honestly and fairly.

25 The Tribunal has also considered the fact that Mr Trlin is a discharged bankrupt. This of its own would not preclude Mr Trlin from being a ‘fit and proper person’ to hold a motor dealers licence. However this fact, together with his other conduct and bearing in mind the particular obligations of a licensed motor dealer in relation to the management of trust monies, leads the Tribunal to find that Mr Trlin is, for reasons additional to those set out above, not a ‘fit and proper’ person to hold a motor dealers licence. Section 12(2)(e) and (g) of the Motor Dealers Act 1974 therefore apply to the Applicant and the licence should not be granted.

DECISION

26 The Tribunal affirms the decision under review.