CITATION: Kioussis v Commissioner for Fair Trading [2006] NSWADT 98 DIVISION: Legal Services Division APPLICANT PARTIES: Penelopy Kioussis RESPONDENT Commissioner for Fair Trading, NSW Office of Fair Trading FILE NUMBER: 052015 HEARING DATES: 22/08/05 SUBMISSIONS CLOSED: 08/22/2005 DATE OF DECISION: 04/05/2006 BEFORE: Karpin A - ADCJ (Deputy President); Hedison J - Non Judicial Member CATCHWORDS: Conveyancer - grant of licence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Conveyancers Licensing Act 1995 APPLICANT J Hyde, barrister REPRESENTATION: RESPONDENT V Griswold, solicitor ORDERS: 1. The supporting material comprising 496 pages filed by the respondent is not admitted into evidence ; 2. The decision of the Commissioner for Fair Trading of 29 April 2005 is set aside; 3. The applicant is to be granted a licence under the Conveyancers Licensing Act 1995 subject only to the conditions set out in section 7 (d) and (e) of the Act. REASONS FOR DECISION 1 On 1 October 2004 the applicant lodged with the Office of Fair Trading an application for a licence under the Conveyancers Licensing Act 1995 (the "CLA"), This is an application for a review of a decision by the delegate of the Commissioner for Fair Trading made on 29 April 2005, following an internal review of a decision made by a different delegate of the Commissioner on 24 March 2005. 2 The applicant sought a review on three grounds: (i) that the office of Fair Trading took into account factors that should not have been taken into account;(ii) that the Office of Fair Trading failed to take into account factors they ought to have been taken into account; (iii) the decision of 29 April 2005 was beyond the powers of the decision maker. 3 The Commissioner found that the applicant had not provided evidence that she would be insured under an approved policy of professional indemnity for the period of the proposed licence. The Commissioner found that the applicant's prior conduct was an impediment to concluding that she is a person of good character, and noted she had provided no evidence of reformation of character. The Commissioner concluded therefore that she was not a fit and proper person to hold an unconditional licence. The Commissioner determined that if a licence were to be granted it should be subject to a condition that: "The Licensee is prohibited from carrying out conveyancing work otherwise than as an employee of a licensee whose licence does not contain such a condition," 4 At the commencement of the hearing of this application before the Tribunal, counsel for the applicant submitted that there were two primary issues of law to be disposed of prior to any hearing on the merits. Those were firstly, whether under the provisions of the Conveyancers Licensing Act 1995 it was open to the Commissioner to apply a "fit and proper person" test to an applicant for a licence; and secondly, whether it was open to the respondent to rely upon a bundle of documents comprising 496 pages, being material considered by the Commissioner in arriving at the decision the subject of this appeal. Those are interrelated issues, because if the Tribunal forms the view that the Commissioner had no power to apply the "fit and proper person" test, it follows that the material upon which the Commissioner came to that view should be excluded from this application. 5 The Reasons for Decision of the Commissioner in both the decisions referred to in para. 1 form part of the pleadings before the Tribunal. BACKGROUND 6 The applicant is a 37 year old woman who between 2000 and 2002 attended the Sydney Institute of Technology where she studied for an advanced diploma in conveyancing. She was awarded a Diploma in 2002. 7 On 5 October 2004, the Applicant applied for a conveyancer's licence under the CLA. 8 In the course of making the usual inquiries relating to such applications, the following facts were disclosed and are set out in the Statement of Reasons of 24 March 2005, and again in the Statement of Reasons of 29 April 2005: (i) The applicant was a director of Venture Industries Pty. Limited between January 1989 and December 1998. The company was placed under external administration in July 1998 and deregistered in November 2000. (ii) During the period 1991-1992 the Building Services Corporation investigated 14 complaints. As a consequence of which in respect of one matter (Butcher) the Applicant was fined $500.00; In 2 other matters (Ferris & Smith), her licence was cancelled and she was disqualified from holding a licence for 2 years. (iii) On 28 January 1993 the Corporation permanently disqualified Venture from holding a licence under the Act. (iv) The Applicant appealed from the decisions by the Commissioner in the Ferris, Smith and Butcher matters. In Smith and Ferris the Tribunal substituted a fine in lieu of the period of cancellation and disqualification. In the Butcher matter, the fine was confirmed. (v) In September 1993, the Trade Practices Commission commenced proceedings seeking relief under the Trade Practices Act, inter alia, against the Applicant. (vi) In November 1993 the Applicant signed as Director, an application by Builtco Construction Management Limited for a building licence, which was issued on 17 November 1993. On 13 April 1994 the licence was cancelled after the application was found to contain a misrepresentation, and Builtco was ordered to stop all work. On 12 September Builtco was fined the maximum penalty in proceedings in the Local Court brought by the Building Services Corporation. (vii) On 9 November 1994 the Applicant was refused an individual contractor licence on the basis that she was not a fit and proper person. She unsuccessfully appealed that decision. (viii) The Building Services Corporation paid out a total of $572,000 in respect of claims against Venture and commenced proceedings against Venture and, inter alia, the Applicant in the Supreme Court which in December 1996 handed down a decision in favour of the Corporation. The Applicant lodged an appeal against that decision which was unsuccessful. (ix) In 1996 the Trade Practices Commission commenced injunctive proceedings against various defendants, including the applicant who was then a director and employee of Venture Industries Pty Limited. It is alleged by the respondent that the applicant's "poor treatment of consumers was exposed during the hearing." (x) In 1996 the Commercial Tribunal upheld a decision of the Director General to refuse the Applicant a contractor licence under the Home Building Act 1989 on the basis that she was not a fit and proper person. (xi) The applicant was declared bankrupt pursuant to a sequestration petition lodged in 1998. She was bankrupt between July 1998 and March 2000. (xii) In October 2000 the Applicant sought the issue of a Qualified Supervisors Certificate. In December 2000 that application was refused on the grounds that the Applicant was not a fit and proper person. The Applicant appealed to the Administrative Decisions Tribunal. [the ADT ] (xiii) In January 2002 the ADT upheld the Director General's decision to refuse the applicant a Qualified Supervisor Certificate under the Home Building Act 1989, on the grounds that she was not a fit and proper person to be granted such a certificate. (xiv) On 7 October 2004 the Applicant applied for a Conveyancers License under the Conveyancers Licensing Act 1995. 9 Upon those findings of fact, together with findings adverse to the applicant which emerged in judicial proceedings, the Commissioner arrived at its decision. Those additional adverse findings are: (i) In December 1996 Hunter J. in proceedings in the Supreme Court found that the applicant was aware of Venture's deceptive practices; she was involved in unsavoury conduct including using abusive language, offensive conduct, harassment; acts of deception and acts of vandalism. He found that she was aware at all relevant times of the incompetence of Venture and acted as a willing and knowing director, and should be held liable for damages in respect of claims against Venture. (ii) In January 2002 the applicant appealed to the ADT against the refusal of the Director General of the Department of Fair Trading to grant her a Qualified Supervisors Certificate. That appeal was dismissed on the grounds, inter alia, that the applicant provided false or misleading information in application forms submitted in 1993 and 2000, being the Builtco application and the application for a Qualified Supervisor Certificate. (iii) The Tribunal found, inter alia, that in the areas of honesty, competence and knowledge, the applicant has a less than satisfactory record, and noted that " While she continues to deny, minimise and deflect responsibility for her conduct, the public cannot have confidence that she will carry out the functions of a qualified supervisor with the honesty. competence and knowledge expected of such a person. Consequently she is not a fit and proper person to be granted a qualified supervisor certificate." 10 The relevant sections dealing with restrictions on grants of a licence are 5,7,10,11 and 13 of the Conveyancers Licensing Act 1995. 5 Disqualified persons (1) A person is a disqualified person for the purposes of this Act if the person: (a) is a corporation, or (b) is an undischarged bankrupt, or (c) has been convicted in New South Wales or elsewhere of an offence involving dishonesty, or (d) is a mentally incapacitated person, or (e) has been removed (otherwise than at his or her own request) from the roll of legal practitioners kept by the Supreme Court or from a corresponding roll of legal practitioners kept by a superior court of another State or Territory, or (f) is disqualified from holding a licence under this Act or the Conveyancers Licensing Act 1992 by virtue of an order in force under section 171C of the Legal Profession Act 1987 (as applying under section 82 of this Act), or (g) is disqualified from being employed in a solicitor's office by virtue of an order in force under section 48I of the Legal Profession Act 1987, or (h) is a disqualified person under the Property, Stock and Business Agents Act 2002. (3) On an appeal against a decision of the Director-General refusing to grant a licence to a person because the person is a disqualified person under subsection (1) (c), the Administrative Decisions Tribunal may determine that the fact that the person has committed the offence concerned should be ignored because of the time that has passed since the offence was committed or because of the triviality of the acts or omissions giving rise to the offence. 7 Qualifications for a licence (1) To be qualified to be granted a licence a person must satisfy the Director-General that he or she: (a) is at least 18 years of age, and (b) has such educational qualifications, practical training and conveyancing experience as the Minister approves by order published in the Gazette, and (c) is not a disqualified person, and (d) has paid such part of any contribution or levy payable under Part 4 as is due and payable on the granting of the licence, and (e) will, for the whole of the period of the licence, be insured under an approved policy of professional indemnity insurance in force with respect to the person or his or her employer, or will as a licensee be exempt under the regulations from the requirement for professional indemnity insurance. 10 Determination of applications (1) After considering an application, the Director-General may determine to grant a licence to the applicant, or to refuse the application. (2) A licence must not be granted to an applicant unless the applicant is qualified to be granted a licence (as provided by section 7). (3) The Director-General may refuse an application on any of the grounds (listed in section 13) on which the Director-General may suspend or cancel a licence. 11 Imposition of conditions (1) A licence may be granted subject to conditions. (2) The conditions may include conditions of the following kind: (a) a condition prohibiting the licensee from carrying out conveyancing work otherwise than as an employee of a licensee whose licence does not contain such a condition, 13 Suspension and cancellation of licences (1) The Director-General may suspend or cancel a licence on any of the following grounds: (a) that the licensee has requested the suspension or cancellation of the licence, (b) that the licensee has failed to comply with a condition of the licence, (c) that the licensee has failed to comply with an order in force under Part 10 of the Legal Profession Act 1987 (as applying under section 82), (d) that the licensee has failed to comply with the requirements of Division 2 of Part 3 in relation to trust money or controlled money, (e) that the licensee has failed to pay any part of a contribution or levy due and payable under Part 4, (f) that there is no approved policy of professional indemnity insurance in force with respect to the licensee (unless the licensee is exempt under the regulations from the requirement for professional indemnity insurance), (g) that the licensee has become a disqualified person, (h) that the licensee has failed to comply with a requirement under this Act to furnish any record, document or information or if any record, document or information so furnished fails to give a satisfactory explanation of the licensee's conduct, (i) that the licensee has been convicted of an offence against this Act or the regulations, (j) that the licensee is an inmate within the meaning of the Crimes (Administration of Sentences) Act 1999, (k) that the licensee is (because of physical or mental illness or infirmity) unfit to carry out conveyancing work and that it is in the public interest that the licence be suspended or cancelled. 11 The Conveyancers Licensing Act 2003 relevantly provides: 8 Eligibility for licence (1) A natural person is eligible to hold a licence only if the Director-General is satisfied that the person: (a) is at least 18 years of age, and (b) is a fit and proper person to hold a licence, and (c) each person with whom the person is in partnership in connection with the business concerned is a fit and proper person to hold a licence, and (d) has the qualifications required for the issue of the licence, and (e) is not a disqualified person, and (f) has paid such part of any contribution or levy payable under section 12 as is due and payable on the granting of the licence. 12 It was common ground before the Tribunal that the repealed Conveyancers Licensing Act 1992 contained a requirement that the licence holder be deemed a fit and proper person. The same requirement is to be found in s. 8 (1) (b) of the Conveyancers Licensing Act 2003. Thus, the provisions of the 1995 Act appear to be somewhat anomalous, in that no mention is made of the "fit and proper person" test, although the act lists qualifications and disqualifications as set out in sections 5,7 & 8. 13 The applicant is not a disqualified person pursuant to the provisions of section 5. 14 The applicant has complied with the provisions of section 7 (1) (a) – (c); and although there was no evidence of the fact, must be assumed to have complied with ss.(d). The requirement to obtain adequate insurance is a condition of all grants of a conveyancers licence. The applicant takes no issue with the condition that the grant of a licence is subject to a requirement to obtain the necessary insurance. Indeed, it was conceded in the course of submissions, that given her history, she may encounter some difficulties in this regard. That, however, is not the concern of this Tribunal. 15 The respondent submits that in pursuance of its duty to protect members of the public, it was proper to have regard to the applicant's history as set out above. In granting her a conditional licence, subject to her obtaining appropriate insurance (a requirement not in issue), and upon condition that she be employed by an appropriate Licensed Conveyancer, the respondent was taking steps to protect members of the public, whilst granting the applicant a licence. 16 The respondent argues that the Commissioner has broad powers under section 11(1) and (2) to grant a licence subject to conditions. In the course of exercising that power, the Commissioner may take into account that an applicant is not a fit and proper person. Whilst that is not a test to be applied on the primary issue of a grant of licence, the respondent argues that it is a matter appropriate to take into account in determining a conditional grant, and that in setting conditions, the Commissioner is discharging the overriding duty to protect the public. 17 The second preliminary issue, is whether or not the Tribunal should admit into evidence the large volume of documentary material upon which the respondent relied in coming to a finding that the applicant was not a fit and proper person to be granted an unconditional licence. The respondent submits that the material was filed with the Tribunal in accordance with the provisions of section 58 Administrative Decisions Tribunal Act 1997 which requires that the respondent to an application to review a reviewable decisions in the Tribunal, must within 28 days of receiving notice of the application, lodge a copy of every document in possession or control of the respondent that is relevant to the decision the subject of the application. The respondent maintains that it has complied with section 58 and the material should be considered by the Tribunal. The respondent submits that section 11 of the Conveyancers Licensing Act 1995 is the only relevant section, and that any documents relevant to the respondent's decision to impose conditions, are relevant and admissible before the Tribunal. 18 The respondent argues that pursuant to its powers under section 63 of the Administrative Decisions Tribunal Act 1997 the Tribunal should admit the material upon which the respondent based its decision and uphold that decision upon the basis that it is the correct and preferable decision. 63 Determination of review by Tribunal (1) In determining an application for a review of a reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law. (2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant enactment on the administrator who made the decision. 19 On behalf of the applicant it is argued that whilst the 1995 Act omitted the fit and proper person requirement, it substituted the comprehensive combined provisions of sections 5,7,10 and 13. 20 It appears that in drafting the 1995 Act, the legislature sought to define those matters which would qualify or disqualify an applicant for a licence under the Act. Given the nature of the legislation and the importance of the protection of the community in determining who is fit to hold a licence, it is unusual, and, in the opinion of the Tribunal, unfortunate that the "fit and proper person" test was omitted. That, however, was the law in force at the time that the applicant sought the grant of a licence. As previously observed, it is a test which applies under both the prior and subsequent Conveyancers Licensing Acts. 21 This application falls for determination under the 1995 Act. It is not for the Commissioner or this Tribunal to import into that Act a term that, it must be presumed, was, however regrettably, deliberately omitted from the Act. The Tribunal is satisfied that the applicant does not fall within any of the disqualifications for holding a licence that are enumerated in the relevant sections of the 1995 Act. 22 It is submitted that the purported exercise of power imposing a condition on the grant of the licence is ultra vires, in that there is no legislative basis for applying a fit and proper person test under the 1995 Act. Further, the wrongful application of that test lead to the imposition of a condition based solely on a finding that the applicant was not a fit and proper person. 23 The Tribunal is not persuaded that section 63 of the Administrative Decisions Tribunal Act 1997 applies to permit the Tribunal to decide that the "correct and preferable" decision is one which applies the "fit and proper person" test, as was urged by the respondent. That section does, however, empower the Tribunal to arrive at a decision based upon the applicable law and relevant factual material. 24 The Tribunal is satisfied that the decision of the Commissioner of 29 April 2005 is based upon the application of a "fit and proper person" test that it was not open to the delegate of the Commissioner to apply, and is thus, ultra vires. That decision must be set aside. 25 In those circumstances, the Tribunal is of the view that the material filed by the respondent should not be admitted into evidence. The reasons for the Commissioner's decisions made on 24 March and 29 April, are, however, part of the pleadings, and accordingly, material before the Tribunal. 26 The history of the applicant as it appears from those decisions, causes the Tribunal some concern. Relying merely upon those matters that are the subject of judicial or quasi-judicial findings, the Tribunal is concerned that there is considerable material to support a prima facie view that the applicant is not a fit and proper person to be held out to the public as a suitable person to hold an unrestricted licence under the 1995 Act. 27 The Tribunal is, however, bound by the provisions of the Act. Accordingly the Tribunal makes the following orders: 1. The supporting material comprising 496 pages filed by the respondent is not admitted into evidence. 2. The decision of the Commissioner for Fair Trading of 29 April 2005 is set aside. 3. The applicant is to be granted a licence under the Conveyancers Licensing Act 1995 subject only to the conditions set out in section 7 (d) and (e) of the Act. 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.