Hadroj -v- Director General, Department of Fair Trading [2002] NSWADT 95

CITATION: Hadroj -v- Director General, Department of Fair Trading [2002] NSWADT 95 DIVISION: General Division APPLICANT PARTIES: James Hadroj RESPONDENT Director General, Department of Fair Trading FILE NUMBER: 023059 HEARING DATES: 31/05/2002 SUBMISSIONS CLOSED: 05/31/2002 DATE OF DECISION: 06/05/2002

BEFORE: Hennessy N (Deputy President) APPLICATION: Second-Hand Dealers licence - grant of licence - Pawnbrokers & Second-Hand Dealers Act - second-hand dealers licence - grant of licence MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Pawnbrokers and Second-hand Dealers Act 1996 Crimes Act 1900 Joyce -v- Commissioner of Police, New South Wales Police Service [2000] NSWADT 17 CASES CITED: Joyce -v- Commissioner of Police, New South Wales Police Service (GD) [2000] NSWADTAP 17 Aguerre -v- Director General, Department of Fair Trading [1999] NSWADT 27 APPLICANT REPRESENTATION: S McAulty, barrister RESPONDENT k Bozinovska, solicitor ORDERS: The decision of the Director General to refuse to grant Mr Hadroj a second hand dealers licence is affirmed.

Background 1 On 23 February 2001 Mr Hadroj applied to the Director-General, Department of Fair Trading for a second-hand dealers licence under the Pawnbroker and Second-hand Dealers Act 1996 (the Act). Under section 8(1)(d) of the Act an applicant is disqualified from holding a licence if he or she has a conviction in New South Wales or elsewhere for an offence involving dishonesty that was recorded within the last ten years. After lodging the application Mr Hadroj advised the Director General that he had been charged with certain offences. The Director General deferred consideration of his application until the outcome of the criminal proceedings was known. 2 On 19 November 2001 Mr Hadroj was convicted of four offences: three counts of goods in custody which may be reasonably suspected of being stolen or otherwise unlawfully obtained and one count of selling second-hand goods without holding a licence. Mr Hadroj advised the Director General of these convictions on 11 January 2002. The Director-General advised Mr Hadroj that his application had been refused because he was disqualified from holding a licence. 3 Mr Hadroj applied for an internal review of this decision. On 7 February 2002, the Director General advised Mr Hadroj that the decision not to grant him a second hand dealers licence had been affirmed. Jurisdiction 4 Section 39 of the Act allows an applicant for a licence whose application has been refused to apply to the Administrative Decisions Tribunal for a review of the refusal. Section 38 of the Administrative Decisions Tribunal Act 1997 confers jurisdiction on the Tribunal to determine this matter. Relevant legislation 5 Section 7 of the Act states that: A person must not carry on a business of buying or selling second-hand goods except in accordance with a licence held by the person. 6 Section 8(1)(d) and s 8 (3) of the Act provide that: (1) An individual is disqualified from holding a licence if he or she: (d) has a conviction in New South Wales or elsewhere for an offence involving dishonesty that was recorded within the last 10 years. (3) The Director-General must refuse to grant a licence to a person who is disqualified by this section, or who is precluded under section 33 or 36 from holding one, but otherwise an applicant is entitled to be granted one. If, however, the applicant has been charged with an offence involving dishonesty, the Director-General is entitled to await the outcome of proceedings on the charge before determining the application. 7 This section makes it mandatory for the Director General to refuse an application from a person who has been convicted of such an offence. However, s 8(4) allows the Tribunal to ignore the conviction in certain circumstances. That provision states that: (4) On an application under section 39 for a review of a decision of the Director-General refusing to grant a licence to a person because the person is disqualified under subsection (1) (d) or (2) (b), the Administrative Decisions Tribunal may determine that the fact that the person has committed the offence concerned should be ignored on one or more of the following grounds: (a) the triviality of the acts or omissions giving rise to the offence, (b) the time that has passed since the offence was committed, (c) the subsequent good behaviour of the offender, (d) any other ground prescribed by the regulations. Issue 8 The Tribunal is reviewing the Director General's decision to refuse Mr Hadroj's application for a second hand dealers licence. The Tribunal must ask itself if any of the offences for which Mr Hadroj has been convicted in the last ten years can be classified as "an offence involving dishonesty." If so, the Tribunal must then determine whether the fact that the person has committed the offence concerned should be ignored on one or more of the grounds set out in s 8(4). Evidence 9 Mr Hadroj gave evidence that he set up a computer business as a sole trader in mid 1999. The business involved the sale of computers as well as technical support. As time went on, he began to accept trade-ins, either for re-sale or for use as spare parts. Mr Hadroj also obtained second-hand computers from auction. He said that he did not know that he needed a second-hand dealers licence in order to accept trade-in or to purchase goods from auction. 10 The three counts of "goods in custody" relate to three computers: a Fujitsu laptop, a Unisys laptop and an NEC Versa 5060 laptop. The police fact sheet tendered in evidence, states that police were involved in an under cover anti theft operation. In relation to the Fujitsu laptop, plain clothes police posing as prospective buyers, attended Mr Hadroj's shop on 19 February 2001. Police asked Mr Hadroj whether he had any laptop computers for sale. Mr Hadroj showed the officers a Fujitsu laptop and admitted selling laptops on behalf of other people through his store. Mr Hadroj said the name of the person who had left the laptop with him was Michael Dean. The parties arranged to meet Mr Dean at the shop the next day. 11 On 21 February 2001 police attended the shop again and spoke to a person calling himself Michael. The police officer paid a $50 deposit for the laptop and arranged to return the following day at 10 am. According to Mr Hadroj, Mr Dean attended at that time but because police were not present, he left after about half an hour. Police officers came at about 11 am and executed a search warrant on the premises. Police seized the Fujitsu laptop computer. 12 Police were of the belief that the computer was stolen because the serial number had been removed and Mr Hadroj had offered the computer for $2600, but said it was worth $5000. During the course of the search warrant Mr Hadroj was asked if any other laptop computers were on the premises. Police located a UNISYS laptop computer in a clothes dryer among some clothes. Mr Hadroj told the police that he had put it there to prevent it from being stolen. Mr Hadroj was unable to provide any proof of purchase in relation this computer but told the Tribunal that he bought it from a Mr Fred Moore on 17 March 2000. Mr Hadroj produced a receipt containing Mr Moore's name and the words "Tradein UNISYS p 133, (not booting) (200)." In relation to this matter Mr Hadroj said that "It was my mistake, I should have kept more records." 13 The third matter related to a NEC Versa 5060 laptop. Mr Hadroj said that a person had brought in this computer for repair and trade-in. It was a Pentium 1 computer which was not working. Mr Hadroj said he paid $200 for it. The name and address of the person who left the computer turned out to be false. Decision and reasons 14 An offence involving dishonesty. The first question is whether an offence of "goods in custody" under s 527 C of the Crimes Act 1900 is an "offence involving dishonesty." Section 527C of the Crimes Act 1900 states that: Any person who: (a) has any thing in his or her custody; (b) has any thing in the custody of another person; (c) has any thing in or on premises, whether belonging to or occupied by himself or herself or not, or whether that thing is there for his or her own use or the use of another; or (d) gives custody or any thing to a person who is not lawfully entitled to possession of the thing, which thing may be reasonably suspected of being stolen or otherwise unlawfully obtained, shall be liable on conviction before a Local Court constituted by a Magistrate sitting alone to imprisonment for 6 months, or to a fine of 5 penalty units. (2) It is a sufficient defence to a prosecution for an offence under subsection(1) if the defendant satisfies the court that he or she had no reasonable grounds for suspecting that the thing referred to in the charge was stolen or otherwise unlawfully obtained. 15 In Joyce -v- Commissioner of Police, New South Wales Police Service [2000] NSWADT 17 the Appeal Panel of this Tribunal upheld a decision at first instance that an offence under s 527C was an offence involving dishonesty. In coming to the same conclusion, I adopt the reasoning in that case and in the decision at first instance: Joyce -v- Commissioner of Police, New South Wales Police Service (GD) [2000] NSWADTAP 17. 16 Triviality of the acts or omissions giving rise to the offence. The next question is whether the offence should be ignored because of the triviality of the acts or omissions giving rise to the offence. The acts or omissions which gave rise to the offence in this case were that Mr Hadroj had three laptops in his possession or on his premises. There were reasonable grounds for suspecting that the computers were stolen or otherwise unlawfully obtained, namely the absence of a serial number on one of the computers and the lack of detail in relation to the identity of the people selling the goods or proof of ownership. 17 The Director General submitted that the convictions are serious in the context of the Act because they involve unlicensed trading and custody or possession of goods reasonably suspected of being stolen or unlawfully obtained. The applicant was placed on a two year good behaviour bond in relation to three of the four offences which suggests that the Magistrate considered these offences to be of a relatively serious nature. 18 The applicant submitted that the penalty imposed by the Magistrate was at the lower end of the range reflecting a finding that Mr Hadroj had failed to take adequate steps to ensure he did not have stolen goods in his possession, rather than the commission of deliberately dishonest acts. The applicant also submitted that given the number of goods at the premises and the minor nature and number of items seized, these offences are at the 'trivial' end of the scale. 19 It is only the goods in custody offences, not the licensing offence, that the Tribunal may consider. Under section 8(4) the Tribunal may ignore offences involving dishonesty. The licensing offence was not an offence involving dishonesty. It is a strict liability offence. The Tribunal must focus on whether the "acts or omissions giving rise to the offence" are trivial. 20 Mr Hadroj's acts or omissions were having three laptops on his premises or in his possession which may be reasonably suspected of being stolen or otherwise unlawfully obtained. Mr Hadroj did not make out the defence that he had no reasonable grounds for suspecting that the laptops were stolen or otherwise unlawfully obtained. 21 Mr Hadroj did not require the people trading-in the computers to provide him with full details of their identity, including documentary confirmation such as the production of a driver's licence. He did not request or obtain any documentary or other evidence of ownership such as receipts. He did not record important identifying information such as the serial numbers of the goods. He apparently failed to question the person who left a computer with the serial number removed. These omissions are not trivial. They are precisely the kinds of omissions that allow dishonest people to trade in stolen goods. 22 The time that has passed since the offence was committed. The offences were committed in February 2001 and Mr Hadroj was convicted in November of the same year. In Aguerre -v- Director General, Department of Fair Trading [1999] NSWADT 27 (12 March 1999) Mr Aguerre was convicted of the offence of stealing on 17 July 1990 and fined $500. The Tribunal found that the time that had passed since the offence was committed justified the exercise of the Tribunal's discretion to ignore the offence. This is not such a case. The offences occurred just over 12 months ago and insufficient time has passed to warrant me ignoring the offence on that basis. 23 Subsequent good behaviour of the offender. The matters addressed in these reasons are the only criminal offences for which Mr Hadroj has been convicted. Mr Hadroj has been of good behaviour since committing the offences, however given the relatively short period of time that has elapsed since the commission of those offences, his subsequent good behaviour is insufficient to justify ignoring the offences. Orders The decision of the Director General to refuse to grant Mr Hadroj a second hand dealers licence is affirmed.