CITATION: Jabar v Director General, Department of Fair Trading [2002] NSWADT 270 DIVISION: General Division APPLICANT Emad Jaber PARTIES: RESPONDENT Director General, Department of Fair Trading FILE NUMBER: 023249 HEARING DATES: 09/12/02 SUBMISSIONS CLOSED: 12/09/2002 DATE OF DECISION: 12/18/2002 BEFORE: O'Connor K - DCJ (President) APPLICATION: Motor Vehicle Repairer - suspension of licence MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Fair Trading Act 1987 Motor Vehicle Repairs Act 1980 El Masri -v- Director-General, Department of Fair Trading [2002] NSWADT 257 CASES CITED: Rizen Smash Repairs Pty Ltd and Alfar -v- Director-General, Department of Fair Trading [2002] NSWADT 173 RJK Automotive Pty Ltd -v- Director-General, Department of Fair Trading [2002] NSWADT 158 APPLICANT REPRESENTATION: I McLaughlin, barrister RESPONDENT A Wilson, solicitor ORDERS: 1. Decision under review affirmed. 1 The review applicant, Emad Jaber, holds Repairers' Licence Number 32432 issued under the Motor Vehicle Repairs Act 1980 (MVR Act), and trades as E Jaber Automotive at 1181 The Horsley Drive, Wetherill Park. The licence was issued 12 March 1997. The business commenced on 2 April 1997. He has held a motor mechanic's trade certificate since 1993. 2 The MVR Act is administered by the Minister for Fair Trading. 3 The Director-General, Department of Fair Trading has power to suspend licences issued under legislation administered by the Minister pending disciplinary action: Fair Trading Act 1987, s 64A(2) (FT Act). He suspended the applicant's licence on 28 October 2002. 4 The Director-General gave short reasons, and notified the applicant of his right to apply for review by the Tribunal. The Director-General referred to advice: * from the police that the applicant was involved in an extensive criminal enterprise involving amongst other matters the rebirthing of stolen vehicles and the subsequent disposal of those vehicles by sale, * from the Roads and Traffic Authority (RTA) that a number of irregularities have been found by its examiners in relation to positive vehicle inspection reports issued by the applicant, and * that the applicant had been charged with conspiracy to dispose of stolen property (the matter is currently pending before the Liverpool Local Court). 5 The applicant applied to the Tribunal for review as permitted by s 64A(8). The applicant sought a stay of the operation of the decision, which was granted by the Tribunal on 6 November 2002, exercising its discretion under s 60 of the Administrative Decisions Tribunal Act 1997 (Tribunal Act). 6 The hearing took place on 9 December 2002. 7 Mr Wilson for the Director-General referred to the evidence filed in support of the Director-General's decision, a folder comprising 414 pages. The applicant filed a short statement to which were attached various testimonials and award certificates showing the high esteem in which the applicant's work and contribution to the community was held. 8 This suspension is one of a number made by the Director-General arising from the police Task Force Worth investigation of two car stealing and rebirthing rackets, one said to be directed by the Elfar family in particular George Elfar, the other said to be directed by the El Hassan family. The Tribunal has referred in detail to the alleged nature of these rackets. Those decisions have also referred to the legislative history of the suspension power given to the Director-General, and the outcome of the review applications made to the Tribunal in respect of suspensions. See generally, El Masri -v- Director-General, Department of Fair Trading [2002] NSWADT 257, Rizen Smash Repairs Pty Ltd and Alfar -v- Director-General, Department of Fair Trading [2002] NSWADT 173, RJK Automotive Pty Ltd -v- Director-General, Department of Fair Trading [2002] NSWADT 158. 9 FT Act, s 64A(2) provides: '(2) If the Director-General is of the opinion that there are reasonable grounds to believe that: (a) a licensee has engaged in conduct that, under legislation administered by the Minister, constitutes grounds for suspension or cancellation of the licence, and (b) it is likely that the licensee will continue to engage in that conduct, and (c) there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently, the Director-General may, by notice served on the licensee, suspend the licence for a period of not more than 60 days specified in the notice, commencing on service of the notice.' 10 The function of the Tribunal on review is to determine, on the material presently available, whether that is the correct and preferable decision: Tribunal Act, s 63. 11 The Tribunal has noted in earlier decisions that the factors are cumulative. The Tribunal must be satisfied as to all three matters. In the earlier cases the first two criteria have usually been found satisfied, and the issue has then become whether in all the circumstances criterion (c) is satisfied. 12 Like many motor vehicle repairers the RTA (which is responsible for registration of motor vehicles) has issued an authority to the applicant, entitling him to undertake vehicle inspections for the purposes of registration and reregistration. It is alleged that he has been involved in the issuance of 'blue slips' (certifying that an unregistered vehicle is acceptable for the issue of a new registration) and 'pink slips' (annual roadworthiness certificates in respect of registered vehicles) in circumstances where a repairer would have recognised that the car was of doubtful identity, and was probably stolen or had incorporated into it stolen parts or stolen identification numbers. The 'blue slip' is the means by which a written off vehicle or wreck can be allowed back on the road. In a rebirthing racket, what is done is that a model of the same type as the wreck is stolen, and the wreck's identity particulars are transferred to the stolen vehicle. 13 The applicant is said to be part of the rebirthing racket connected with the Elfar family of which George Elfar (said to have left the country) is the principal. The context is similar to that of the earlier cases mentioned above. The RTA, on 12 September 2002, suspended the applicant's authority to issue vehicle inspection reports. 14 The evidence in support of these concerns is strong. 15 The police have charged the applicant with conspiracy to dispose of stolen property. The police fact sheets are at 09-18 of the Director-General's evidence. There is telecommunications intercept material directly implicating the applicant in the Elfar family's activities. In some intercepts he is referred to as someone undertaking work for them, and in others he is recorded conversing with the Elfars with a view to undertaking such activities as RTA checks on the identity of vehicles. Call charge records show direct calls from the applicant's business to Rizen Pty Ltd (frequently) to George Elfar's mobile (twice) and to the shipping company he is alleged to have used to ship the containers (three times) (295-348). 16 On its face this material suggests that the applicant had a close involvement with the Elfars. 17 The exact record of interview (204-294) made 1 August 2002 has been provided. He refers to the nature of his connection with George Elfar, and having done work regularly for him in connection with the smash repair business he had owned, Rizen; and that he had brought him about 10 cars over an extended period (287). He denied having ever done any unauthorised pink or blue slip inspections (at 260), and stated later that he wished to be co-operative (279). He denied any knowledge of George Elfar being involved in untoward activity and having stolen vehicles, rebirthed vehicles and stolen parts shipped by the container to other countries. 18 The main segment of the Director-General's evidence is a statement by Noel Aceglav, qualified motor mechanic and experienced inspector with the RTA (pages 034-192). The report contains Mr Aceglav's assessment of the bona fides of 11 vehicles based on an examination of the RTA record books held at the premises. Mr Aceglav then selected certain of the vehicles based on the information in the records and his knowledge of the profile of vehicles that are likely to be the subject of rebirthing activity. The statement records Mr Aceglav's findings in respect of the 11 vehicles, most of which were visually inspected by him. The material provided in relation to each vehicle includes the results of police checks done as to the origins and identity of the suspect vehicle, the findings in that regard, the applicant's vehicle inspection report and Mr Aceglav's comments as to possible breaches of the rules governing the issuance of such reports and other breaches of the law. In his statement Mr Aceglav explains the factors that constitute anomalies that would have been obvious to an experienced person like the applicant. 19 The police prepared a status report on the vehicles as at 6 November 2002, and found that 3 were confirmed stolen (unregistered Mitsubishi Pajero, Ford Fairmont XVM 983, Honda Integra YDA 107) and two had anomalies (Honda Civic YCM 277, Holden Gemini GEM 11Y). At hearing Mr Wilson for the Director-General advised that three more were now also reported as stolen, Ford Falcon YAK 333, Ford Falcon DVS T8U and Daihatsu Charade YDQ 423. 20 There is a supplementary statement from Mr Aceglav referring to one of a further 6 vehicles that fell into the high profile category. The further statement reports anomalies in relation to one of them, a Camry CSI (350-364). Mr Aceglav outlines his doubts about the vehicle. The material includes a statement from a Bankstown car dealer reporting suspicious contact with him over the vehicle, and noting that after he raised concerns with the prospective vendor he returned with a blue slip from the applicant's business. 21 Mr Aceglav's report also annexes the RTA details for the applicant. He has been the subject of concern previously. He was issued with a notice of suspension on 14 March 2001 for 3 months. He appealed and the Burwood Local Court dismissed the appeal but quashed the suspension instead ordering him to attend retraining. The applicant alludes to these events in the record of interview (276), and says he was 'cleared'. 22 The material at 192-196 comprises statements from a couple who sold as a wreck a Nissan Maxima VKV 773, for which a 'pink slip' was issued by the applicant. The wife swore that she was not a party to a RTA transfer of sale document which showed her as the seller of the vehicle to a Mr Saleem Alfar. This vehicle links to the El Masri case recently dealt with. The police report that its number was changed to XSG 957, and is the vehicle sold by George Elfar to Milad Goryia via Masri Motors. Director-General's Case 23 The Director-General's submission as to criterion (a) is that there is substantial evidence to justify the formation of the view that the applicant has engaged in conduct which would constitute grounds for suspension or cancellation of the licence. Under the MVR Act, s 42(1) various grounds are set out. In this case the Director-General submits that the circumstances fit, at least, within ground (h): '(h) that the business to which the licence relates is being carried on in a dishonest or unfair manner'. 24 The material presented by the Director-General constitutes, I am satisfied, reasonable grounds to believe that the applicant provides a key link in a wider enterprise. He provided certificates of legitimacy that enable cloned and stolen vehicles to enter the ordinary market. The material is sufficient to support the conclusion that he has failed on several occasions, to put it at its most generous, to identify the kind of anomalies in vehicles presented that a competent inspector would see. It may be that he was not aware of the extent of the overall enterprise said to be led by George Elfar, but that is doubtful on the basis of the intercept and call records information. As matters presently stand there is substantial evidence to satisfy criterion (a). 25 The second and third criteria (b) and (c) now need to be considered: is it likely that the licensee will continue to engage in that conduct (b); and (c) is there a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently. 26 In this case there is a pattern of irregular conduct shown by the examples identified by Mr Aceglav. Moreover the applicant has previously been the subject of RTA action. 27 In these circumstances, it seems to me to be clear that criterion (b) is satisfied – the licence holder is likely to continue to engage in irregular conduct. 28 It was put that as the RTA authority had been suspended, the applicant was not in a practical position to engage in the offensive conduct. 29 I gave some weight to a submission along these lines in the El Masri case. In that case the licence holder had no prior adverse history, and his evidence was that he had only once engaged in the kind of activity that led to his suspension (arranging finance for a purchase). 30 I saw it as open to the Director-General in that case to meet the possibility of repetition of the conduct by the imposition of a condition preventing that activity, and then allowing the applicant to continue to trade. 31 This is a worse case on the material presently available. It is true that the removal of the RTA authority means that the applicant can not engage in precisely the same conduct as he did previously. 32 There is a high frequency of irregular conduct identified by Mr Aceglav. There are reasonable grounds for concluding that the applicant has a propensity to engage in dishonest or unfair conduct. 33 It is no answer in my view to say, as was put in submissions on behalf of the applicant, that the applicant has already been punished sufficiently in that his RTA authority has been removed. It is said that he should be allowed to continue as a licensed motor repairer. It is said any dubious conduct in relation to the issuance of RTA reports does not bear on his work as a motor vehicle repairer. 34 In reply Mr Wilson for the Director-General emphasised that the RTA only issues authorities to persons who are licensed motor vehicle repairers, and registration reports are an integral part of such businesses. I agree with Mr Wilson. The applicant's work can not be compartmentalised in the way suggested. Apparent dishonesty in any aspect of the business is a matter with which the Director-General must be concerned. The applicant in his record of interview recognised, as I see it, the integrated nature of his activities. He referred to the importance to a repairer for getting business that an RTA approval represented. He spoke of the number of competing repair workshops to be found in his area of Sydney; and the value of the RTA status. 35 The third question (c) is whether there is a danger that a person or persons may suffer significant harm, or significant loss or damage, as a result of that conduct unless action is taken urgently. 36 As to the 'significant harm' component, I have accepted in earlier cases that rebirthing gives rise to major costs for innocent consumers and insurers. 37 The question that raises more difficulty is whether action needs to be taken urgently. 38 The power of suspension is a reserve tool of the disciplinary system affecting Fair Trading licence holders. The presumption is that a licence holder against whom it is proposed to take disciplinary action should be allowed to continue to trade until he or she is found guilty of a disciplinary offence and an order suspending or cancelling the licence is made. The Minister emphasised when introducing the new power that it would be exercised cautiously. The implications of this policy have been discussed in other decisions. 39 In this case I am satisfied that there is sufficient material to support the case for action to be taken urgently. The applicant's previous history in unsatisfactory. The report of Mr Aceglav raises many concerns. The applicant had a regular association with the alleged principal in the racket, George Elfar. The applicant has been charged with conspiracy to dispose of stolen vehicles. This is a combination of factors of the kind to which the power of suspension was, I consider, intended to be directed by the Parliament. 40 I acknowledge that the likelihood of anyone connected to the alleged Elfar conspiracy engaging in irregular or unlawful conduct in the near future is low. The police and the other authorities have now exposed their hand, conducted raids, conducted numerous interviews and laid charges against some. It will now be well known that extensive covert surveillance was employed. As I see it, this factor may have some relevance in a less strong case (as I saw El Masri). But it should not be given weight in a case of the present kind. 41 I acknowledge that the applicant has presented a number of very positive testimonials as to the quality of his repair work, the satisfaction of his customers and the commendations his business has received for its contribution to the local community. 42 The object of the disciplinary system (of which these proceedings form part) is the protection of the public and the maintenance of standards among licensed persons. The focus in these proceedings must therefore primarily be on the applicant's conduct of his business. This is a case where only limited weight can be given to the testimonials that he has presented. There is in my view a clear case for suspension pending disciplinary proceedings. 43 It follows from this decision, that the stay order issued on 6 November 2002 lapses. Order 1. Decision under review affirmed. 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.