CITATION: Artarmon auto Recycling Pty Ltd -v- Director General, Department of Fair Trading [2000] NSWADT 141 DIVISION: General Division APPLICANT Artarmon auto Recycling Pty Ltd PARTIES: RESPONDENT Director General, Department of Fair Trading FILE NUMBER: 003236 HEARING DATES: 11/09/2000 SUBMISSIONS CLOSED: 09/28/2000 DATE OF DECISION: 10/13/2000 BEFORE: Britton A - Judicial Member APPLICATION: Motor Dealer - grant of licence - Motor Dealers Act - motor dealer - grant of licence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Motor Dealers Act 1974 Briginshaw v Briginshaw (1938) 60 CLR 336 M v M (1988) 166 CLR 69 CASES CITED: Trilin v Department of Fair Trading [1999] NSWADT 72 Haining v Commissioner of Police, NSW Police Service [1999] NSWADT 6 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Saadieh v Director General Department of Transport [1999] NSWADT 68 APPLICANT REPRESENTATION: B Rosic, solicitor RESPONDENT K Bozinovska, solicitor ORDERS: The decision of the Director General is affirmed. 1 This decision relates to an application for review of a decision made by the Director General of the Department of Fair Trading (the administrator), refusing to grant Artarmon Auto Recycling Pty Ltd (AA Recycling) an auto dismantlers' licence under the Motor Dealers Act 1974 (the Act). An internal review affirmed the administrator's original decision. 2 On 12 July 2000, Paul Marriott, a director of AA Recycling lodged an application for review of this decision with the Administrative Decisions Tribunal (the Tribunal). Leave was granted by the Tribunal pursuant to s 81 of the Administrative Decisions Tribunal Act 1997 (the ADT Act), on 11 September 2000, to amend the application by substituting Artarmon Auto Recycling Pty Ltd for Paul Marriott, as the named applicant in these proceedings. 3 The issue for the Tribunal to determine is whether the administrator in refusing to grant AA Recycling an auto dismantlers licence, made the correct and preferable decision having regard to the relevant legislative provisions. Relevant Legislation 4 Section 4 of the Act defines an auto-dismantler to mean a person who carries on the business of: (a) demolishing or dismantling motor vehicles or parts or accessories of motor vehicles, or (b) buying motor vehicles and substantially demolished or substantially dismantled motor vehicles and selling substantially demolished or substantially dismantled motor vehicles (whether or not the person also sells parts or accessories of motor vehicles), or (c) buying and selling prescribed kinds of parts or accessories of motor vehicles. 5 The grant or refusal of an auto-dismantler licence is a matter for decision by the Administrator pursuant to Part 2 of the Act. Section 9 of the Act makes it an offence for a person to carry on the business of an auto-dismantler without a licence. 6 Section 12 of the Act sets out the circumstances in which the Director General must refuse to grant an auto-dismantlers licence. Section 12 (4)(f) of the Act provides: (4) An application for a licence made by a body corporate shall be refused if it appears to the Director-General that: (f) a director of, or a person concerned in the management of, the body corporate is not of good reputation or character or in any other way would not be a fit and proper person to be the holder of a licence if the director or person were to apply for the licence personally. 7 Section 20F of the Act provides that an applicant 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 s 53 of the ADT Act. Evidence 8 The Tribunal had before it relevant documents provided by the respondent pursuant to s58 of the ADT Act. These included the applicant's licensing file held by the Department. 9 The Statement of Reasons attached to the 22 June 2000 notice advising the applicant of the decision that an internal review had affirmed the administrator's original decision, makes clear that the applicant's criminal record is the basis for the administrator's decision to refuse to grant the licence. 10 The Statement of Reasons sets out a summary of Mr Marriott's criminal history and is set out below: 05/03/1991 Ryde Local Court 1. Resist Arrest - Fined $100 19/07/1991 Ryde Local Court 1. Resist Arrest 2. Run Red Light 1 & 2 on each charge - Fined $200 14/5/1992 Parramatta Local Court 1. High PCA - Fined $700 Lic Disq 18 Mths 2. Resist Arrest - Fined $300 17/07/1997 Ryde Local Court Fail to quit premises when refused entry by Licensee Fined $200 - Court costs $51 25/02/1998 Ryde Local Court 1. Goods in personal custody reasonably suspected being stolen - Fine $400 2. Possess prohibited drug - Fine $200 10/02/2000 Parramatta Local Court 1. Drive on road when licence refused - Fine $200 Disqualification: 12 months concluding 10.02/2001 2. Driver/rider state false name or address - Fine $300 Disqualification: 12 months concluding 10/02/2001 11 Mr Marriott gave oral evidence at the hearing. Various documents were tendered in evidence outlining his educational and occupational qualifications and details of his work history. He gave evidence that he became a director of AA Recycling in early 1999. After completing his apprenticeship as a motor mechanic with the State Rail Authority in 1992, Mr Marriott has worked continuously as a motor mechanic or in various jobs in the motor industry. Many of the positions held by him since 1992 have involved dealing with members of the public and handling money and banking. He gave evidence that he was unaware of any complaint being made against him by any customer or previous employer. He was granted a security industry licence in 1998. 12 Mr Marriott gave evidence that none of the offences for which he has been convicted involved physical violence. He gave evidence that his conviction on 25 February 1998 before the Ryde Local Court involved the possession of a small amount of marijuana for personal use. His conviction on the same day for goods in custody related to various items: two mobile phone and a collection of personal items. He gave evidence that one of the phones, a NEC mobile, had been left with him by a friend as security for a debt. The second phone, a Motorola International had been found by a friend in a park. He was unsure how it had ended up at his home. Both phones were early analogue models and of no value. He did not think the phones were stolen when he took possession of them. 13 The items of a personal nature included a drivers licence and various credit cards of a person unknown to Mr Marriott. He gave evidence that a friend gave him a bag at a social function, containing these items. At the time he did not know what was in the bag. He later inspected the bag and realised it contained the contents of someone's wallet; he rang his friend who told him 'get rid of it.' He gave evidence that he would not have taken the items if he thought they were stolen. He had intended to throw the items out when he got around to cleaning up his room. This was his first property offence. 14 He gave evidence that the conviction before the Parramatta Local Court on 10 February 2000 related to two offences committed on New Years Eve, 1999. At that time his drivers licence had been cancelled because of his failure to pay a speeding fine. He had decided to drive in place of his girlfriend who been drinking; she was insistent that they drive to see the fire works; he was concerned that had he not volunteered to drive she would have driven regardless; he was concerned for her safety; he had not planned or intended to drive that night. While driving to the fire works he was pulled over and breathalysed by police; when they asked for his details he panicked and gave the name and address of a friend. He later gave his correct details. 15 He gave evidence that he has made a significant financial commitment in his auto dismantling business. He has entered into a three year lease; his monthly rental is $5,200. 16 He gave evidence that the reason he failed to disclose his February 2000 conviction, in his licence application, was because he did not consider it to be an offence involving fraud or dishonesty, but rather something akin to a speeding fine. He did disclose the 1998 goods in custody offence in that application form. 17 Five character references were tendered on behalf of Mr Marriott. All attest to his good character. A number of referees indicated they had worked with Mr Marriott in the past in the motor industry. Jeffrey Ranson, Director, Aero Auto Rentals stated that Mr Marriott had been employed by him for just under two years and in that time had been required to handle large sums of money; at all times he found his employee to be trustworthy. The reference provided by Mark McDonald of Nissan attested to Mr Marriott's honesty and reliability throughout their ten year association. All referees acknowledged Mr Marriott's criminal record. Findings and Conclusions 18 Section 12(4) of the Act is in mandatory terms and provides that an application for a licence made by a body corporate must be refused if it appears to the Director General that any of the circumstances set out in s 12(4) apply to the applicant and or the applicant's director. 19 Ms Bozinovska for the respondent submits that to invoke s 12(4) of the Act it is enough that it appears to the Director General that one or more of the circumstances set out in ss 12(4)(a) to (j) apply, whether or not the circumstances do as a matter of fact, apply. Ms Bozinovska argues that the use of the word 'appears' in the context of s 12(4) means that there is no obligation imposed on the Director General to make an enquiry to discover the 'truth.' In support of this argument Ms Bozinovska relies on Robinson v Sunderland[1899] where it was held that the term 'appear' meant that the 'judge', in that case, a local authority, merely had to be 'of the opinion'. 20 Mr Rosic for the respondent submits that there are a number of definitions of the term 'appears' and relies on the following contained in the Macquarie Encyclopedic Dictionary: ' to be obvious, to be clear or made clear by evidence'. Mr Rosic rejects the argument put forward by the respondent, which appears to suggest that a decision of the Director General can be made arbitrarily without evaluation and consideration of the subjective circumstances of each application. The proper approach for the exercise of the Director's powers under s 12(4), argues Mr Rosic, is for the administrator to embark on an evaluation process to determine whether any of the circumstances set out in s12(4) apply to the applicant or the applicant's director. Having made such enquiry, if the Director General is then satisfied that any of those circumstances apply, the Director General has no discretion but to refuse the application. 21 I am not persuaded by the Department's submissions that the use of the word 'appears' permits the Director General to conclude that the circumstances of 12 (4) apply to an applicant or an applicant's director without regard to the truth and or relevance of the material on which such opinion is based. Indeed it is difficult to see how the Administrator could conclude that it appears that an applicant was not of good reputation or character or in any other way not a fit and proper person to be the holder of a licence without an assessment of the relevant facts. It does not automatically follow that a person who holds a criminal record must be seen to appear not to be a fit and proper person to hold an auto dismantlers licence. The wording of s12(4) does not suggest that a criminal record automatically disqualifies a person from holding a s12 licence 22 While s12(4) grants to the Director General considerable flexibility in what material s/he may take into account , it is well establishes that in cases involving occupational licensing a proper evidentiary foundation must be found for his/her decision, based on reasonable satisfaction as to relevant circumstances. As with any occupational licencing decision, 'reasonable satisfaction,' ' should not be produced by inexact proofs, indefinite testimony, or indirect inferences. ... weight is given to the presumption of innocence and exactness of proof is expected' (per Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362-3, reaffirmed in M v M (1988) 166 CLR 69 at 77). 23 The expression 'fit and proper person' in the context of the issuing of a motor dealers licence was considered by this Tribunal in Trilin v Department of Fair Trading [1999] NSWADT 72. In that decision the Tribunal endorsed the approach taken by the President of this Tribunal in Haining v Commissioner of Police, NSW Police Service [1999] NSWADT 6 at [41], 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.' 24 It is evident from the authorities that the concept of what constitutes a 'fit and proper person' is not capable of objective definition. Chief Justice Mason in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at [63] said that: 'The question whether a person is fit and proper is one of value judgment. 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 and propriety are under consideration.' 25 The decision of Deputy President Hennessy in Saadieh v Director General Department of Transport [1999] NSWADT 68; provides useful guidance on the approach to be taken in an assessment of whether a person convicted of a criminal offence is fit and proper to hold an occupational licence. In that decision the Deputy President set out a number of factors to be taken into account in determining a person's suitability and fitness to obtain and hold a taxi authority. These include: the nature, seriousness and frequency of any criminal offences for which the applicant has been arrested or convicted; the nature, seriousness and frequency of any complaints made against the applicant; the applicant's reputation in the community; and the likelihood that the applicant will re-offend, be the subject of further complaints. 26 The evidence establishes that Mr Marriott has a stable employment record. He has held various jobs in the motor industry. He has been entrusted with significant sums of money by successive employers and customers. There is no evidence before this Tribunal that Mr Marriott has abused that position of trust. His criminal record does not relate in any way to his employment history. The respondent raises no issue, which would indicate that, his conduct as an employee in the motor industry and or his qualifications are a matter of concern. 27 However as is clear from the authorities it is not enough that the applicant's director establish that he has an unblemished work record in the industry in which the licence is sought. An assessment of whether an individual is a fit and proper person involves a broader enquiry taking into account a range of considerations such as the character of the applicant. Sub-section 12(4) (h) expressly requires the administrator to have regard to the applicant's reputation and character. 28 Mr Marriott's criminal record reveals that over the past ten years he has been convicted of nine separate offences. None involve violence. With the exception of the offences committed in 1998 and 2000 none involve dishonesty. 29 The 1998 goods in custody conviction is of particular relevance to a determination of whether Mr Marriott meets the Act's requirement that the holder of an auto-dismantler licence be a fit and proper person. As stated by President O'Connor in Haining an assessment of a person's fitness to hold an occupational licence must be considered in the context of the public policy objectives which led the legislature to regulate the industry. The Act sets out a scheme for the licensing of auto-dismantlers and motor dealers. It provides for the granting of licences, requires licensees to keep certain records, imposes certain obligations on dealers in relation to motor vehicles offered or displayed for sale, requires dealers to maintain trust accounts and other financial accounts, 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. 30 It is apparent that the public policy objective of requiring an applicant for an auto-dismantler licence to demonstrate high standards of integrity is to discourage consumer fraud in an industry, where as is self evident, the potential for fraud is considerable. 31 Mr Rosic urges the Tribunal to reject the Department's argument that Mr Marriott's 1998 and 2000 convictions are indicative of a person who has a propensity or is likely to deal with stolen property. Mr Rosic points out that in relation to the 1998 conviction Mr Marriott was not convicted of the more serious offence of receiving stolen property pursuant to s189 of the Crimes Act, 1900, but rather of the lesser offence of having items in his possession reasonably suspected of being stolen or otherwise unlawfully obtained: s527C(1) of the Crimes Act. 32 In relation to the various offences committed on New Year's Eve 1999 Mr Rosic submits that the applicant's explanation to the Department and the evidence given before this Tribunal establishes that the offence of stating a false name and address to police was not premeditated but a foolish decision, made under pressure and promptly remedied. 33 The goods in custody conviction is the most serious of the offences for which Mr Marriott has been convicted and most directly relevant to an assessment of his suitability to hold a licence under the Act. Mr Rosic is correct that the charge is a dishonesty offence, but of less seriousness than offences such as larceny or receiving. The offence is a curious one in the criminal law in that the prosecution only has to prove that item in question is reasonably suspected of being stolen or unlawfully obtained. This is a very low threshold. If a suspicion is raised concerning the provenance of the goods, the onus then falls on the defendant to prove that he or she had no reason to suspect that the goods were stolen or unlawfully obtained. 34 Perhaps not surprisingly it is an offence commonly dealt with in Local Courts. It is a matter of common knowledge, of which I can take judicial notice, that stolen goods are frequently sold or given away by thieves or receivers in places such as hotels, bars and cafes. Mobile telephones are frequently stolen and sold for low prices to purchasers seeking a bargain. Police are frequently unable to prove that goods are stolen or have been illegally received by the persons in possession, but the circumstances surrounding the possession are suspicious. In those circumstances, they often prefer a charge of 'goods in custody' against the person whose explanation or possession of the goods they find suspicious. 35 The innocent explanation proffered by Mr Marriott to this Tribunal about how he came to have in his possession two mobile phones, a drivers licence and various credit cards of a person unknown to him, is somewhat implausible. In relation to the latter he claims the goods were delivered to him in a closed bag by a friend; he accepted the bag without even a cursory glance at its contents; his suspicions were not aroused when his friend told him 'just get rid of it'; he saw no value in attempting to return the contents to their owner or taking them to the police, as in his opinion, given the passage of time, the original owner had no doubt taken steps to replace the items. In relation to the phones the Tribunal was told that neither were of any value, one was left by a friend as security for a debt, even though Mr Marriott had no use for it; he was not entirely sure how the second phone, the Motorola came into his possession; it had been was found by a friend in a park. 36 At worst this explanation indicates that Mr Marriott has not been candid with the Tribunal and took custody of goods, which he reasonably suspected of being stolen; at best it indicates that Mr Marriott was exceedingly naïve and prepared to accept goods in circumstances, which to a reasonable person would appear suspicious. Importantly the evidence reveals that Mr Marriott has accepted property of dubious origins on not one, but three separate, and unrelated, occasions. 37 Leaving aside the two most recent convictions Mr Marriott's criminal history reveals a number of offences which individually are relatively minor in nature, but taken together indicate a pattern of behaviour of minor disobedience to the law. Had the 1997 dishonesty offences been Mr Marriott's sole conviction and committed some years ago, Mr Rosic's submission that the Tribunal can be confident that this was a one off error of judgement, would have more weight. 38 The adverse inference that can be drawn from Mr Marriott's criminal record must be balanced against his impressive employment record in a related industry, numerous testimonials from colleagues and previous employers and importantly, Mr Marriott's claim that he deeply regrets those acts, which resulted in him obtaining a criminal record. However I remain troubled by the 1997 goods in custody offence which at best shows that Mr Marriott was prepared on three separate occasions to accept goods with reckless disregard as to whether they had been lawfully obtained. I am not satisfied that sufficient time has passed to establish that Mr Marriott's claims of contrition are genuine and his past offences will not be repeated. Accordingly, taking into account all relevant considerations, I am not satisfied that the evidence establishes that at this stage the applicant's director meets the requirements set out in s12(4) (h) of the Act. ORDERS 39 I affirm the decision under review. 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.