Delta Trading Corporation Pty Limited -v- Director General, Department of Fair Trading [2000] NSWADT 132

CITATION: Delta Trading Corporation Pty Limited -v- Director General, Department of Fair Trading [2000] NSWADT 132 DIVISION: General Division APPLICANT Delta Tradin Corporation Pty Limited trading as Delta Loan Office PARTIES: RESPONDENT Director General, Department of Fair Trading FILE NUMBER: 003225 HEARING DATES: 21 August 2000 SUBMISSIONS CLOSED: 08/21/2000 DATE OF DECISION: 09/15/2000

BEFORE: Hennessy N (Deputy President) APPLICATION: Pawnbrokers & Second-Hand Dealers Act - second-hand dealers licence - grant of licence - Pawnbrokers & Second-Hand Dealers Act - second-hand dealers licence - revocation or suspension of licence - Second-Hand Dealers licence - grant of licence - Second-Hand Dealers licence - revocation or suspension of licence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Pawnbrokers and Second-hand Dealers Act 1996 CASES CITED: APPLICANT REPRESENTATION: P Khanhar, solicitor RESPONDENT A Wilson, solicitor ORDERS: The Director General's decision to revoke the applicant's licence and place a condition on its renewal is affirmed.

Background 1 Ms Nguyen is one of the directors of the applicant, Delta Trading Corporation Pty Limited (Delta). The other director, Kim Son Dang, died on 13 September 1999. Delta was the holder of a Pawnbroker and Second-hand Dealers Licence issued on 17 April 1998. On 26 June 2000 the Director General revoked the licence under s 36(4) of the Pawnbrokers and Second-hand Dealers Act 1996 (the Act) and, under s 36(3) of the Act, determined that Delta not be granted a further licence for a period of 2 years. Delta has applied to the Tribunal for a review of that decision. 2 Two inspections of Delta's business records were conducted by Department of Fair Trading officers in September and November 1998. On 20 May 1999, Delta's licence was renewed and a condition placed on the licence requiring records to be kept electronically. Departmental officers conducted an interview with Ms Nguyen, Mr Dang and their solicitor on 9 July 1999. A Notice to Show Cause as to why its licence should not be revoked, was served on Delta on 19 October 1999. Section 34(1)(h) and (i) of the Act allow the Director General to serve such a notice on any licensee: (h) who has failed to comply with a condition of the licence, or (i) who the Director-General considers, in light of evidence acceptable to the Director-General, is carrying on the licensed business in a dishonest or unfair manner. 3 The Director General's revocation of the licence, pursuant to s 36 of the Act, was based on his satisfaction, on the balance of probabilities, that the grounds in the Show Cause Notice had been substantiated. It was alleged that Delta had failed to comply with a condition which was placed on the licence on 20 May 1999, that records be created and stored electronically. Delta accepted that they were in breach of this condition until 26 August 1999. 4 The second ground was that Delta was carrying on the licensed business in a dishonest or unfair manner. The main basis for this ground was the inadequacy and/or inaccuracy of records kept about the identity of the owners of three mobile phones purchased by Delta on 1 September 1998. While Ms Nguyen accepted that she had not complied with all the requirements of the legislation, she did not accept that her failure to do so was unfair or dishonest. The Director General also alleged that Delta had sold goods contrary to a requirement in the legislation not to sell certain categories of goods within 14 days of buying or receiving them. Ms N's explanation for this was that she was under the impression that the goods had been purchased at auction so there was no need to comply with the time period. 5 Delta responded to the Notice to Show Cause on 2 November 1999. On 26 June 2000, after taking into account Delta's submissions, the Director General decided to revoke the licence. Jurisdiction 6 The Tribunal has jurisdiction to hear this matter pursuant to section 38 of the Administrative Decisions Tribunal Act 1997 (ADT Act) and section 39(2) of the Pawnbrokers and Second-hand Dealers Act 1996. 7 Generally an internal review must be finalised before a person can apply to the Tribunal for a review of a decision. (See s 55(1)(b) of ADT Act.) In this case, the applicant did not apply for an internal review of the Director General's decision. Because the matter would be unnecessarily delayed if an internal review was carried out at this stage and because the application to the Tribunal was made within a reasonable time after the Director General's decision, the Tribunal decided to deal with the application without the need for an internal review pursuant to s 55(2)(c) of the ADT Act. Issue 8 As provided in s 63 of the ADT Act, the Tribunal must determine whether the decision of the Director General to revoke Delta's licence, and refuse to grant a further licence for 2 years, is the correct and preferable decision. If not, the Tribunal must vary or set aside the decision. In making such a determination, the Tribunal must take into account the material before it including any relevant factual material and any applicable written or unwritten law. Legislation 9 There are several provisions in the Act and in the Pawbrokers and Second-Hand Dealers Regulation 1997 (the Regulations) which are relevant to these proceedings. It is an offence under s 7 of the Act to carry on a business of buying or selling second-hand goods without a licence. In relation to electronic records, section 11 and 16 of the Act and Clauses 13 and 13A of the Regulations require certain second hand dealers to keep records electronically. As there was no dispute about the applicability of these provisions to Delta, I have not set out the provisions in this decision. 10 The objective of the electronic record keeping provisions is apparent from the Regulatory Impact Statement to the Regulation which states, in part, that: The proposed Regulation specifies that licensees must keep detailed records and maintain records in a computerised form. This is to enable the direct transmission of data to police on a regular and timely basis. This data is then able to be cross checked against computerised records of stolen goods. These requirements help to ensure that the Act operates to increase the effectiveness of law enforcement to recover stolen goods and apprehend offenders. 11 The provisions of the legislation also require second hand dealers to record certain information about the identity of the seller and other matters when accepting any goods offered for sale. Section 15 of the Act provides that: (1) On each occasion before accepting any goods offered for sale or pawn, a licensee must obtain evidence of the identity of the person by whom the goods are being offered. (1A) The evidence must include documentary evidence that shows the person's name and address, being evidence of a kind prescribed by the regulations, and must also include other evidence of any further particulars relating to the identity of the person that are required by the regulations. (1B) The regulations may provide for that additional evidence to be in oral or documentary form and may prescribe the kind of evidence required. (3) A licensee must not accept any goods offered for sale or pawn without first complying with any requirements of the regulations relating to ascertaining the title to the goods. 12 Clause 14(2)(a) of the Regulation sets out certain particulars which are prescribed for the purposes of section 16(1). That clause states that: (2) The following particulars are prescribed for the purposes of section 16(1) of the Act in so far as the licensee carries on the business of a second-hand dealer: