Civil and Administrative Tribunal New South Wales Medium Neutral Citation: SNB Plus 3 Pty Ltd (Macleay Trailers & Steel Fabrications) v Commissioner for Fair Trading [2023] NSWCATOD 29 Hearing dates: 1 March 2023 Date of orders: 14 March 2023 Decision date: 14 March 2023 Jurisdiction: Occupational Division Before: J Levine, Senior Member Decision: (1) The Decision under review is affirmed. (2) The stay granted by the Tribunal on 3 August 2022 is lifted. Catchwords: ADMINISTRATIVE REVIEW – Motor Dealers and Repairers – Application under Motor Dealers and Repairers Act 2013 – whether manager a 'nominated person' for purpose of motor dealer licence renewal application form – whether licence was renewed in error or because of a misrepresentation and therefore properly cancelled under section 22A(1) of Motor Dealers and Repairers Act 2013 Legislation Cited: Administrative Decisions Review Act 1997 (NSW) Civil and Administrative Tribunal Act 2013 (NSW) Motor Dealers and Repairers Act 2007 (NSW) Motor Dealers and Repairers Regulation 2014 (NSW) Cases Cited: nil Texts Cited: nil Category: Principal judgment Parties: SNB Plus 3 PTY LTD (Macleay Trailers & Steel Fabrications) (Applicant) Commissioner for Fair Trading (Respondent) Representation: Counsel: I Fraser (Applicant) C Lambert (Respondent) Solicitors: Lindeman Lawyers (Applicant) Department of Customer Service (Respondent) File Number(s): 2022/00221160 Publication restriction: nil REASONS FOR DECISION Introduction 1. This case concerns review of a decision by the NSW Fair Trade Commissioner (the "Respondent") to cancel the licence of SNB Plus 3 Pty Ltd (trading as Macleay Trailers & Steel Fabrications) (the "Applicant" or "SNB") under section 22A of the Motor Dealers and Repairers Act 2013 (NSW) ("MDR Act"). 2. The issue for determination is whether the Respondent was correct in cancelling the Applicant's licence under Section 22A(1)(b) of the MDR Act, which relevantly provides that a licence can be cancelled if the Respondent is satisfied that the licence was renewed "in error (whether as a result of a misrepresentation by the holder or not)." 3. For the reasons that follow, and in circumstances where proceedings involving fraud or dishonesty had been commenced against the Applicant's manager at the time of the renewal application, I find that the licence was renewed in error and the Respondent acted correctly under section 22A(1) of the MDR Act to cancel it. The decision under review is therefore affirmed. Background The Applicant's business and its March 2021 licence application 1. The Applicant is a business engaged in building custom trailers, based in South West Rocks, on the mid-north coast of New South Wales. Its sole director and current manager is Mrs Sarah Martin. Her husband, Mr Bradley Martin, was a manager of the business up until recently. 2. On 18 March 2021, SNB filed an application with the Respondent for a Motor Dealers Licence. The application was completed on behalf of SNB by Mrs Martin and nominated two managers, Mrs Sarah Martin and Mr Bradley Martin. Each of them signed a consent form agreeing to be nominated as a manager in respect of the business to which the licence/application relates and authorising NSW Fair Trading to conduct criminal record checks and make other inquiries relevant to their nomination as a manager. The consent forms stated that: A licence holder must not employ any person as a manager … if the licence holder is aware or ought reasonably to be aware that … (c) proceedings have been commenced against the person in New South Wales or elsewhere in relation to an offence involving fraud or dishonesty… 1. The application was granted on 19 May 2021 and SNB was issued with Licence Number MD084939 ("Licence") for a one-year period. Complaints about and investigation into SNB's business 1. The Applicant's business experienced a range of delays in the past few years in light of supply chain issues, Covid-19 lockdowns, border closures, staffing issues and natural disasters. On 5 October 2021, NSW Fair Trading in conjunction with NSW Police commenced an investigation after a number of consumer complaints were made about SNB accepting payment and not supplying goods. 2. The investigation led to Bradley Martin being charged on 15 April 2022 with two offences of dishonestly obtaining a financial advantage by deception under the Crimes Act 1900 (NSW). SNB's application to renew Licence in May 2022 1. On 11 May 2022, Mrs Martin completed an online application for renewal of the Licence on behalf of SNB. 2. In the "Declarations" section of the form, Mrs Martin declared "no" in response to Question 5: "Has any individual nominated in this application been found guilty, within the preceding 10 years, of any offence or have proceedings for any offence pending against them?" When Mrs Martin completed the renewal form, she knew that her husband, who was then still the manager of SNB, was facing criminal charges, but she says she answered "no" because she believed herself to be the only individual nominated in the 2022 renewal application. 3. A screenshot of the online renewal application shows that the form included the Licence number M0084939 and that the current Licence was issued on 19 May 2021, and the same licence, if renewed, would expire on 18 May 2023. The renewal form then had a series of eleven "Miscellaneous Questions". Question 1 asked for the "name of the director making this online application on behalf of the corporation and agreeing to the declaration below". Mrs Martin put her own name in response to that Question 1. As for the remaining ten questions, reproduced below (emphasis added), she answered "no" to all of them: 2. Do you intend to sell motor vehicles on consignment? 3. Is any individual nominated in this application a controlled member of a declared organisation under the Crimes (Criminal Organisations Control) Act 2012? 4. Is any individual nominated in this application an undischarged bankrupt? 5. Has any individual nominated in the application been found guilty, within the preceding 10 years, of any offence or have proceedings for any offence pending against them? 6. Has the applicant or any individual nominated in this application been convicted of an offence against the Motor Dealers and Repairers Act 2013 or regulations or any Act administered by the Minister for Fair Trading? 7. Has the applicant or any partner or individual nominated in this application failed to pay any contribution or other payment required to be paid by them to the compensation fund under the motor dealers and repairs Act 2013? 8. Has the applicant or any partner or individual nominated in the application had any application for a licence, certificate or other authorisation under any act refused 2013? 9. Has the application or any individual nominated in this application failed to comply with a rectification order made against them under the Motor Dealers and Repairers Act 2013? 10. Is the application or any partner corporation in the course of being wound up, have a receiver or other controller appointed or entered into a compromise or scheme of arrangement with its creditors? 11. Is the applicant unable to meet its liabilities due to insufficient financial resources? 1. Renewal of the licence was granted on the same day the form was submitted, i.e., 11 May 2022, based on the information provided in the application. Notice of intent to cancel and notice of cancellation in June 2022 1. On 8 June 2022, a delegate of the Respondent issued a notice of intent to cancel the Licence. The delegate cited Section 22A(1)(b) of the MDR Act and shared the preliminary view that the Licence "should be cancelled, as at the time of granting the licence, an individual nominated in this application has proceedings for an offence against them". The Applicant was invited to provide additional information and submissions within two days for consideration. The Respondent stated that: "If it is determined that the error cannot be rectified or there was a misrepresentation (whether or not fraudulent), Fair Trading will be required to proceed with the cancellation." 2. Mrs Martin sent an email to her solicitors on 8 June 2022 saying that the question the Respondent was referring to "was not asked in the online renewal portal or I would have answered it truthfully as I had already discussed with you guys." 3. On 9 June 2022, the Applicant's solicitors asked the Respondent for a copy of the renewal application form, as Mrs Martin had no recollection of seeing "a question relating to pending charges associated with any director o[r] manager of her company". 4. The solicitors did not receive a response until 28 June 2022, when the Respondent sent a screenshot of the Applicant's online renewal application. 5. On 29 June 2022, the Respondent issued a cancellation notice in relation to the Applicant's licence, informing the Applicant that NSW Fair Trading had determined to cancel the Licence pursuant to section 22A(1)(b) of the MDR Act. The Respondent gave the Applicant reasons, advised the Applicant that it would no longer be able to carry on the business of motor dealer, and informed the Applicant of its rights of review. 6. The Applicant's solicitors wrote immediately to the Respondent to submit that an error had been made and requesting that the Licence be reinstated as a matter of urgency, noting that SNB had not had the opportunity to respond to the notice of intent to cancel and stating that Mrs Martin was director and manager of the business and had no pending offences against her. They also noted that SNB employs 4 people on a full-time basis and is Mrs Martin's "primary income stream". Internal review of original decision in July 2022 1. The above email was forwarded to NSW Fair Trading's Reviewable Decisions section on 1 July 2022 and treated as a request for internal review of the Respondent's decision pursuant to section 53 of the Administrative Decisions Review Act 1997 (NSW) ("ADR Act"). 2. On 19 July 2022, a delegate of the Respondent notified the Applicant that its request had been considered but the decision had been taken to affirm the original decision to cancel the Licence ("Decision"). In the reasons for the Decision, the Respondent recalled the objects and purposes of the MDR Act and recounted the background to the cancellation of the Licence. The Respondent explained: Sarah Martin was nominated as Director and Bradley Martin as Manager of SNB Plus 3 Pty Ltd on 19 May 2021, when the motor dealer licence was granted. A corporation must nominate an individual to be the manager of the day-to-day business of the licensee and Mr Martin signed the Manager's Consent Form on 2 June 2020. Therefore, Mr Martin is considered an individual nominated in the application, as he currently holds the position of manager of the business. It is questionable that Mrs Martin, as director, would not consider that the manager of the business is an individual nominated in the application. Records indicate that Mr Martin has been charged with two offences, dishonestly obtain financial advantage or cause disadvantage by deception, and the matters have been adjourned to 28 July 2022. These offences involve fraud or dishonesty and Mrs Martin in the renewal application, declared that no individual nominated in the application has proceedings for any offence pending against them. This is clearly incorrect, as proceedings against the manager of the company, Mr Martin, are currently pending. It is doubtful that Mrs Martin was not aware of the pending offences concerning the manager. Failing to disclose pertinent facts about the criminal history of all interested parties nominated in the application provides grounds for cancellation of the licence. Notwithstanding, a false declaration is considered an offence under the Crimes Act. Application to this Tribunal for administrative review and for a stay 1. The Applicant applied to the NSW Civil and Administrative Tribunal ("Tribunal") on 27 July 2022 for administrative review of the Decision, pursuant to section 176 of the MDR Act and section 63 of the ADR Act. The Applicant also sought a stay of the Decision pursuant to section 60 of the ADR Act. 2. On 3 August 2022, the stay application was determined by Principal Member Simon, who granted a stay and decided the Applicant's Licence for all purposes is treated as on foot until the Tribunal's final determination of the substantive application in these proceedings ("Stay"). Relevant Legislation 1. The objects of the MDR Act are set out in section 3. They include: (a) to provide consumer protections and remedies for consumers who purchase motor vehicles from motor dealers or obtain motor vehicle repair services, (b) to establish appropriate standards of conduct and transparency for motor dealers, motor vehicle repairers and motor vehicle recyclers, (c) to provide enforcement mechanisms to prevent misleading or dishonest conduct and illegal dealings with motor vehicles and parts, … 1. Part 2 of the MDR Act establishes a licensing scheme which requires any person to carry on the business of a motor dealer to have a licence. Section 20B sets out details to be included in licence applications. Section 21 of the Act makes Part 2 of the Licensing and Registration (Uniform Procedures) Act 2002 apply in respect of licenses under the MDR Act, subject to modifications and limitations prescribed by the MDR Act or the regulations. 2. Section 22A of the MDR Act is the key provision in issue for this case. It provides: 22A Revocation of licences by Secretary (1) The Secretary may, by notice in writing given to a licence holder (a cancellation notice), cancel the licence if the Secretary is satisfied that— (a) the licence was granted, renewed or restored because of a misrepresentation made by the holder, or (b) the licence was granted, renewed or restored in error (whether as a result of a misrepresentation by the holder or not). (2) A cancellation notice takes effect on the day that it is given to the licence holder or on a later day specified in the notice. (3) The Secretary may, by further notice given to the licence holder (a restoration notice), restore a licence cancelled under this section if the Secretary is satisfied that— (a) the licence holder acted in good faith, or (b) the error has been rectified, or (c) the licence should be restored. (4) A restoration notice takes effect on the day that it is given to the licence holder, or on a later day specified in the notice. 1. Other relevant provisions include section 23(1), which allows the Secretary to "make any inquiries that the Secretary considers necessary in relation to an application for a licence" and section 23(2) which provides for the police to investigate an application for a licence and report to the Secretary at the request of the Secretary. 2. Section 25 sets out the grounds for refusal of a motor dealers licence as follows: (2) The Secretary must not grant a licence to an individual if the Secretary is satisfied of any of the following— (a) that the applicant is not over the age of 18, (b) that the applicant is not a fit and proper person to hold a licence, (c) that the applicant is a controlled member of a declared organisation,… (d) that the applicant is an undischarged bankrupt, (e) that the applicant does not have the qualifications, if any, prescribed by the regulations for the purposes of the licence concerned, (f) that the applicant has (as an adult) been found guilty, within the preceding 10 years, of a motor vehicle stealing offence. (3) The Secretary must not grant a licence to an applicant that is a body corporate if the Secretary is satisfied of any of the following— (a) a director or person involved in the management of the body corporate, or any other person who appears to the Secretary to have control or substantial control of the body corporate, would, if the director or person applied for the licence as an individual, be prohibited by this section from being granted the licence, … (c) the reputation of the body corporate is such that it is not a fit and proper person to hold a licence. … (5) The Secretary may refuse to grant a licence to an applicant if the Secretary is satisfied of any of the following— (a) that a close associate of the applicant is not a fit and proper person to hold a licence, … 1. The Motor Dealers and Repairers Regulation 2014 ("MDR Regulation") sets out in Part 7, "Conduct of business" clause 37, which provides that "certain persons not to be employed as manager". (1) A licence holder must not employ or continue to employ any person as a manager of notified premises to which the licence relates if the licence holder is notified by the Secretary, or if the licence holder is aware or ought reasonably to be aware, that— … (c) proceedings have been commenced against the person in New South Wales or elsewhere in relation to an offence involving fraud or dishonesty, or … Maximum penalty—20 penalty units. 1. Finally, the Tribunal notes that the Licensing and Registration (Uniform Procedures) Act 2002, Part 2 of which applies by virtue of section 21 of the MDR Act, provides in section 24 that a licensee "must notify the relevant licensing authority, within 14 days after the change, of any change that occurs in the licensee's name, address or other registered particulars". Jurisdiction to Review the Decision 1. According to section 9 of the ADR Act and sections 28 and 30 of the Civil and Administrative Tribunal Act 2013 (NSW) ("CAT Act"), the Tribunal has jurisdiction over a decision of an administrator if enabling legislation provides that applications may be made to the Tribunal for administrative review. 2. Section 176 of the MDR Act gives this Tribunal jurisdiction, as it allows a person to apply to the Tribunal under the ADR Act for an administrative review if the Secretary "refuses to grant an application for, or suspends or cancels, a licence". 3. In determining an application for administrative review, section 63 of the ADR Act provides that this Tribunal is to decide what "the correct and preferable decision" is having regard to "any relevant factual material, and any applicable written or unwritten law". In determining an application for administrative review of a decision, the Tribunal may decide to affirm the decision, to vary the decision, to set aside the decision and make a decision in substitution, or remit the matter for reconsideration by the administrator (ADR Act, section 63(3)). 4. Under section 38(2) of the CAT Act, the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. 5. Based on the above provisions, the Tribunal finds that it has jurisdiction to decide this administrative review. Issues for Determination 1. The issue for determination in the present administrative review is whether the Respondent was correct in cancelling SNB's Licence in accordance with Section 22A(1)(b) of the MDR Act, which relevantly provides that a licence can be cancelled if the Respondent "is satisfied that… the licence was granted, renewed or restored in error (whether as a result of a misrepresentation by the holder or not)." 2. The Tribunal notes that there are also disciplinary proceedings pending at this Tribunal concerning Mrs Martin as an individual, as well as criminal court proceedings pending against her husband as an individual. As confirmed by the parties at the hearing, those other proceedings do not directly impact the relatively narrow question before the Tribunal in this administrative review matter brought by SNB. Material before the Tribunal 1. The Tribunal has had regard to the following material provided by the parties. The documentary material from the Applicant comprised the following. 1. NCAT Application dated 27 July 2022, attaching: 1. First Affidavit of Sarah Martin, the manager and sole director of the Applicant, sworn on 27 July 2022. Mrs Martin describes the effect of the Decision on her and the business and also the delays experienced as a result of Covid-19 and natural disasters over the past two years. She stated that: 4. As a result of these delays, we had several customers who made complaints to Fair Trading. All customers who complained to NSW Fair Trading have received full refunds. A complaint was made to NSW Police and my husband Brad Martin (Brad) was charged with Fraud related charges on or around 8 April 2022. Brad works as a manager at the Company. … 10. When completing the renewal application, I did not intend to misrepresent the Company in any way. I misunderstood the question. 1. The Respondent's 8 June 2022 notice of intent to cancel the Licence, granting 2 days to comment before a final determination. 2. An email from the Applicant's solicitor dated 9 June 2022 to NSW Fair Trading asking for a copy of the application for renewal. 3. The screenshot of the Applicant's online renewal application, emailed by the Respondent to the Applicant's solicitor on 28 June 2022. 4. The Respondent's Decision dated 29 June 2022 notifying the Applicant that the Respondent had decided to cancel its Licence. 1. Copy of the Respondent's internal review determination made on 19 July 2022 and filed by the Applicant with the Tribunal on 2 August 2022. 2. Second Affidavit of Sarah Martin sworn on 13 September 2022, in which she stated that: 4. In completing the 2022 online renewal form I did not understand that I was nominating Brad Martin as a manager. I do not recollect that his name appeared on the online form as someone nominated as a manager. 5. In answer the question "Does any individual nominated in this application have proceedings for an offence pending against them?", I understood that I was answering only in relation to myself. I did not intend to make any representation regarding Brad Martin. 6. I did not intend there to be any misrepresentation in the online form. 1. The Applicant's Submissions filed on 2 November 2022 responding to the submissions of the Respondent dated 14 October 2022. 1. The Respondent's Submissions dated 1 August 2022 in connection with the Applicant's urgent stay application. 2. The Respondent's Submissions of 29 August 2022, filed on 14 October 2022. 3. The documents filed by the Respondent on 16 October 2022, pursuant to section 58 of the ADR Act comprised: 1. Manager's Consent Form signed by Sarah Martin on 5 May 2020 2. Manager's Consent Form signed by Bradley Martin on 2 June 2020 3. Online Application for Licence of 18 March 2021 4. Email from Applicant to Respondent of 12 May 2021 5. Email from Respondent to Applicant on 8 June 2022 with Notice of Intention to Cancel 6. Copy of Notice of Intention to Cancel of 8 June 2022 7. Email from Applicant's solicitors to Respondent in respect of Notice to Cancel dated 9 June 2022 8. Email dated 28 June 2022 from Respondent to the Applicant's solicitors attaching a screenshot of the online renewal application 9. Email from Respondent to Applicant's solicitors and Applicant from Respondent attaching Notice of Cancellation of 29 June 2022 10. The Respondent's Notice of Cancellation of 29 June 2022 11. Email from Applicant's solicitor to Respondent of 29 June 2022 12. Email of 1 July 2022 from Business Licensing to Reviewable Decisions 13. Email of 1 Jul 2022 from Reviewable Decisions to Applicant's solicitors 14. Email of 11 July 2022 from Licensing to Reviewable Decisions 15. 15 April 2022 copy of court attendance notices charging Bradley Martin under section 192(1)(b) of the Crimes Act 1900 and Statement of Facts 16. Email of 19 July 2022 to Applicant's solicitors attaching Internal Review 17. Internal Review Decision of 19 July 2022 affirming decision to cancel Licence. 1. On 20 February 2023, the Respondent filed the following materials with the Tribunal in advance of the hearing: 1. Statements to be used at the hearing: 1. Mr Phillip Avramis' Statement dated 16 February 2023. Mr Avramis is a customer of the Applicant who complained about Mr Martin an lodged a claim with the Tribunal for a refund of his deposit. His statement is accompanied by 28 exhibits, including communications between himself and Mr Martin, complaints to NSW Fair Trading, and banking records. 2. Mr Sandy Pintamalli's Statement of 17 February 2023. Mr Pintamalli is a solicitor with NSW Fair Trading. He describes the trader Profile system and attaches the Trader Profile for the Applicant, which shows that the Applicant has received 113 complaints from consumers since 2019. 3. Mr Habib Ghorra's Statement dated 16 February 2023. Mr Ghorra is a customer of the Applicant who complained about a trailer which he has still not received, despite paying a deposit. 4. Mr Solh's Statement dated 16 February 2023. Mr Solh is Mr Ghorra's son-in-law. 5. The Applicant's submissions in connection with an interim hearing in the matter of Sarah Martin v NSW Fair Trading, Case No. 2023/00045433, which concerns disciplinary action against Mrs Martin under section 45 of the MDR Act. 6. Mr Ronald Glenn Brown's Statement dated 16 February 2023. Mr Brown is a customer who paid a deposit for a trailer but has not yet received it. 7. Mr Justin De Lacy Peek's Statement dated 10 February 2023. Mr De Lacy Peek is a prior customer of the Applicant and a repeat customer who is currently awaiting a trailer for which he has paid a deposit and reported his complaint to the police. His statement is accompanied by copies of various messages. 1. A set of three Court Attendance Notices charging Bradley Scott Martin under section 192E(1)(b) Crimes Act 1900, filed on 7 November 2022. 1. A hearing was held via video conference on 1 March 2023. The above-listed documents were all admitted to the record. Mr Fraser appeared for the Applicant. He objected to the relevance of the items listed in paragraph 41 above and explained that they do not bear on the narrow issue for resolution in the administrative review matter before the Tribunal in the present case. Mr Lambert, appearing for the Respondent, noted that Mrs Martin in her affidavits had testified about her understanding of her declarations in the online renewal form and about whether or not she intentionally made a misrepresentation or was mistaken. She had also stated that all the customers who had complained to Fair Trading had received refunds. The Respondent noted that the materials listed in paragraph 41 bear directly on Mrs Martin's credibility and it was on that understanding that the Tribunal admitted those materials, while appreciating the relevance point made by Mr Fraser. At the hearing Mrs Martin gave oral testimony and answered questions from Mr Lambert and the Senior Member. The Parties' Positions The Applicant's submissions 1. The Applicant observes that the "power to revoke a licence is enlivened when either the holder of the licence makes a misrepresentation (section 22A(1)(a), or alternatively when it is granted, renewed or restored in error (whether or not it is as a result of a misrepresentation) (section 22A(1)(b)). 2. The Applicant points out that the question on the form enquired about criminal convictions or proceedings in relation to "any individual nominated in this application." The Applicant contends that a review of the application completed on 11 May 2022 "reveals that Mr Martin was not a person nominated in that application. The only individual's name that is mentioned is that of Sarah Martin." While Mr Martin was a person previously nominated in the 2021 application and by his 2020 consent form, the Applicant states that "No question was asked in the online form concerning persons previously nominated." According to the Applicant, the relevant question "related only to those persons nominated in the 11 May 2022 application". 3. The Applicant does not dispute that Mrs Martin knew that Mr Martin had been charged. Rather it posits that the application "simply did not ask for any information regarding Mr Martin." The Applicant submits that had the Respondent wished to seek information regarding Mr Martin, the form should have either asked about any person who was nominated on the current licence, or alternatively listed the persons currently nominated and asked the applicant to confirm the position in relation to such persons." The Applicant's counsel stressed that the form is not as clear as it should be if it is seeking to ask about previously nominated persons. 4. In those circumstances, the Applicant maintains that it cannot have been a misrepresentation to have not provided information regarding Mr Martin. In the circumstances, the Applicant submits "there is also no applicable error by the Applicant or Mrs Martin". Section 22A of the Act is not "intended to capture deficiencies in the design of the Respondent's forms." The form simply did not ask the right question. It was inelegantly phrased and that is a problem for the Respondent to bear, not the Applicant. 5. On the Applicant's construction of the renewal form, Mrs Martin was simply not asked about Mr Martin. She was only asked about the "applicant", i.e., and "any individual nominated in this application" which was limited to Mrs Martin. It did not extend to the managers nominated in prior forms. 6. The Applicant concludes that the criteria in section 22A for revocation of the licence did not arise, and that the correct and preferable decision would be for the Tribunal set aside the decision of the Respondent. The Respondent's Submissions 1. The Respondent notes that any corporation must nominate an individual to be the manager of the day-to-day business of the licensee. It submits that Mr Martin is considered an individual nominated in the application for renewal of the Licence, as he held at the time the position of Manager of the business, as evidenced in his consent form and the 2021 Licence application. It is therefore, in the Respondent's view, inconceivable that Mrs Martin as the director of SNB would not consider that Mr Martin as Manager of the business was an "individual nominated in the application." 2. It is also inconceivable to the Respondent that Mrs Martin was not aware of the fact that her husband had been interviewed and charged by the police weeks before she filled out the declaration in the on-line application form for renewal of the Licence. 3. The Respondent submits that failing to disclose pertinent facts about the criminal history of all employees nominated in the application provides grounds for cancellation of the licence. Accordingly, the Respondent maintains that the original decision to cancel the decision was correct in identifying that, as a result of the misrepresentation of Mrs Martin the licence had been incorrectly issued. 4. Irrespective of Mrs Martin's intentions, the Respondent contends that the threshold in Section 22A(1)(b) is "not absolute". All the Secretary's delegate has to be satisfied of in cancelling a licence is that the "licence was granted, renewed or restored in error (whether as a result of a misrepresentation by the holder or not)". The threshold is therefore that the error can either be by a misrepresentation by the holder or simply due to an error. This is not a high threshold. In Mrs Martin's own words of her Second Affidavit, she "misunderstood the question" and made an error. 5. The Respondent also argues that it defies belief that Mrs Martin, as the long-standing sole director of the Applicant, would not have understood who the manager at the time of the renewal was and that she was required to disclose in the declaration about nominated individual, pertinent facts about the criminal history of all interested nominated parties. The Respondent says that Mrs Martin's statement that she thought the disclosure questions only related to her shows a "distinct lack of ability" that would also go to whether she is fit and proper person to be an officer of the licensee. 6. The Respondent reiterates that the renewal was not for Mrs Sarah Martin as an individual but for SNB as a company. The renewal was sent to Mrs Martin as the sole director of SNB. The renewal was also not a nomination for Brad Martin to be the Manager. That form had already been completed on 2 June 2020 and submitted with the 2021 licence application. The Respondent submits that when Mrs Martin completed the on-line form as the Director of SNB she was "required to consider all the respective roles of the employees that comprise her business in answer the disclosure questions", including Bradley Martin as manager. As such, the Respondent considers it "disingenuous and a further misrepresentation" for Mrs Martin to posit that she thought the declaration only applied to herself. 7. The Respondent's primary position is that Mrs Martin fully understood that she was making the application on behalf of SNB, and the declarations were made in relation to all individuals nominated to be managers in the business. The Respondent cast doubt on whether Mrs Martin was a witness of good credit, having given conflicting answers about when Mr Martin was still a manager, and the extent to which complaining customers had been refunded, with the evidence listed at paragraph 41 above contradicting her affidavits. 8. The Respondent maintains that even if Mrs Martin did not deliberately make a misrepresentation, the same result arises under section 22A(1)(b) because the renewal of the licence was done in error. The Respondent submitted that the "error" referred to in section 22A(1)(b) need not be an error on the part of the licence holder or the person completing the application form. It could also be an error within the department made by the Secretary when issuing the licence. It is therefore not necessary for the Tribunal to accept that Mrs Martin understood the form and intentionally filled it out incorrectly, or even that she misunderstood the form and filled it out in error. The Respondent says the language of the provision is broad enough to cover the situation where the Respondent became aware that the licence had erroneously been renewed without taking into account Mr Martin's fraud charges. 9. The Respondent requests that the Decision be affirmed and the Stay lifted. Tribunal's Consideration 1. It is undisputed that at the time Mrs Martin completed the on-line renewal application in May 2022, she fully understood that: 1. She was making the application on behalf of the company SNB as the holder of the Licence and not on behalf of herself personally. 2. Her husband Bradley Martin was still registered as, and was still in fact working as, a manager of SNB, having been nominated as a manager when the application for the Licence was made back in 2021. (At the hearing, Mrs Martin confirmed that she did not file forms with Fair Trading removing her husband as a manager until October 2022). 3. Her husband had been charged in April 2022 with at least two fraud-related offences (proceedings for which are ongoing). 1. In these circumstances, the Tribunal considers whether Mrs Martin should have answered "yes" instead of "no" to Question No. 5 in the declarations portion of the on-line Licence renewal application. The Tribunal finds that she should have answered "yes" because Mr Martin, as manager, fell within the meaning of "any individual nominated in the application". 2. The Tribunal accepts that the form (or at least the portion in the screenshot provided to the Tribunal) did not explicitly and separately ask whether, for each of the individuals registered as a manager on the current Licence, they were facing criminal charges. The Tribunal also accepts that Mrs Martin did not manually enter the name of her husband into the declarations part of the online form for renewal of the Licence. Nevertheless, the Tribunal finds that Mr Martin is properly understood as being included in the phrase "any individual nominated in the application". That is apparent from the nature of the form as a renewal application of an existing Licence, the words used in the form, and the object and purpose of the MDR Act. 3. It was clear that the application form was for the renewal of an existing Licence. The application form listed the Licence Number MD084939, that its status was "Current", its start date was "19/05/2021", and the Request type was "Renewal". By referring to the current Licence, it was unnecessary in the renewal form to re-enter details that were included in the original application, such as the business address, the ACN and contact details of the Applicant, and the personal details of Associated Parties, namely the Director and the Managers. It is reasonable to assume that (unless there was a change) those details carried over in the renewal process, and as such the managers nominated for the current Licence were also being nominated for the renewed Licence. 4. The terms used in the eleven questions of the application form also indicated that more the questions were being asked about more than one person. The "applicant" for example (here SNB), was specified separately from "the name of the director who is making this online application on behalf of the corporation and agreeing to the declaration below" (here Mrs Martin). Those terms were used separately from "any individual nominated in this application" and "any partner" of the applicant or "partner corporation". Some questions were directed only to the applicant, such as Question 2 (intention to sell motor vehicles on consignment) and Question 11 (ability to meet liabilities). Question 5 was framed as applying to "any individual nominated in this application". The context of the form makes clear that this is not just SNB the applicant company, and not just Mrs Martin as the "director" but would extend to include the individuals nominated in the current Licence that SNB was seeking to renew. This would cover Mr Martin. As noted above, Mrs Martin was fully conscious that Mr Martin was still a manager and was freshly facing charges for fraud-related offences. 5. Moreover, the object and purpose of the MDR Act, and the licensing scheme of which the renewal application forms part, make it reasonable to read Question 5 as covering Mr Martin. The MDR Act is aimed at providing "consumer protections", establishing "appropriate standards of conduct and transparency" and providing "mechanisms to prevent misleading or dishonest conduct" (section 3). It is entirely consistent with these objects to keep Fair Trading abreast of any fraud or dishonesty related charges against any manager of a licensed motor dealer business. This was made perfectly clear to both Mrs Martin and Mr Martin when they signed their manager consent forms connected with the 2021 application for the Licence. Those forms state that the "nominated manager(s) … must authorise NSW Fair Trading to conduct criminal record checks and to make any other inquiries and to receive and disclose any information which is relevant to their nomination as manager." That authorisation is set out again just above the signature line. The form also recites the content of clause 37 of the MDR Regulation, including that a licence holder must not employ any person as a manager if the licence holder is aware or ought reasonably be aware that proceedings have been commenced against the person in relation to an offence involving fraud or dishonesty. Mrs Martin confirmed at the hearing that she fully understood the import of those sections of the manager form at the time she submitted the application for the Licence in 2021. Understanding the importance of those provisions and the objects of the Act, it makes no sense to declare differently about pending charges against one director filling out the form, and pending charges against one of the managers of SNB's business. 6. In the Tribunal's view, therefore, Mrs Martin ought to have understood Question 5 as covering Mr Martin and she ought to have answered "yes" to Question 5 of the renewal application in order to complete the form correctly. 7. However, the Tribunal is not convinced that Mrs Martin acted in bad faith or intentionally hid Mr Martin's criminal charges from NSW Fair Trading. She testified in both her affidavits and at the hearing that she misunderstood the form. She believed it was asking only whether she, as the person named as the director in answer to Question 1, was facing criminal charges. She did not think the information carried over from the original licence but that this was a "new year, new form". There is some support in the documentary material that she believed that. She wrote to her solicitors on 8 June 2022 saying that she thought that any question about Brad "was not asked in the online renewal portal or I would have answered it truthfully as I had already discussed with you guys." 8. It is not necessary, however, for the Tribunal to find that Mrs Martin deliberately misled NSW Fair Trading by answering "no" to Question 5. The decision to cancel the licence was not made pursuant to section 22A(1)(a) of the MDR Act which allows the Respondent to cancel a licence if it was renewed "because of a misrepresentation made by the holder" (even then, a misrepresentation need not be intentional). The Respondent's questions directed at her credit and the veracity of her intentions at the time of completing the online application are therefore largely irrelevant in this administrative review matter. 9. Rather, the Respondent's decision to cancel the licence was made pursuant to section 22A(1)(b) of the MDR Act, which provides for cancellation if the Secretary is satisfied that "the licence was granted, renewed or restored in error (whether as a result of a misrepresentation by the holder or not)". 10. For reasons already set out above, the Tribunal considers that in completing the form, Mrs Martin did make an error by declaring "no" in response to Question 5 when she knew that Mr Martin was facing fraud-related charges while still a manager of the business. That is sufficient to find the licence was granted in error and to empower the Secretary to cancel the licence under Section 22A(1)(b). Had Mrs Martin so understood Question 5 and honestly answered "yes", it is unlikely that the Secretary would have granted the renewal the same day as the application, as happened on 11 May 2022. 11. However, even if the Tribunal were to accept the Applicant's submission that the form was inelegantly drafted and simply did not ask the question in sufficiently clear or wide terms to cover Mr Martin, the Tribunal still considers that the licence was renewed "in error". That is because the error did not need to be Mrs Martin's error. The Tribunal agrees with the Respondent that the provision is drafted in sufficiently broad terms—"in error (whether as a result of a misrepresentation or not)"—to cover errors not just by the licence holder but also errors by NSW Fair Trading itself. 12. It is apparent from the timing of the licence being renewed on the same day as the Applicant's online application, that the licence renewal was granted (possibly automatically) on the basis of the answers in the form, without the Secretary pursuing necessary inquiries (as provided in section 23(1)) or taking into account the factors listed in section 25 of the MDR Act. Presumably, once the charges pending against Mr Martin (and perhaps the 113 complaints against the business listed in SNB's trader profile in the NSW Fair Trading database appended to Mr Pintamalli's affidavit) were brought to the attention of the Secretary internally, the "error" of having granted the licence renewal was realised. 13. As noted above, the terms of section 22A(1)(b) are sufficiently broad to allow the Secretary to cancel licences renewed "in error (whether as a result of a misrepresentation or not)" where that error is on the part of the holder of the licence, or on the part of the granter of the licence. Conclusion 1. Based on the considerations outlined above, the Tribunal finds that the correct and preferable decision to be made on the facts and circumstances of this case is to affirm the Decision under review. The Licence was renewed in error on 11 May 2022, having overlooked that SNB's nominated manager had recently been charged with fraud related offences. Once this error was realised, it was open to the Respondent to invoke section 22A(1)(b) of the MDR Act to cancel the Licence. The Tribunal finds the licence was properly cancelled pursuant to section 22A(1)(b) of the MDR Act. Orders 1. The Tribunal makes the following orders: 1. The Decision under review is affirmed. 2. The stay granted by the Tribunal on 3 August 2022 is lifted. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 March 2023