CITATION: Alexander & Hassan Pty Ltd -v- Director General, Department of Fair Trading [2000] NSWADT 181 DIVISION: General Division APPLICANT Alexander & Hassan Pty Ltd PARTIES: RESPONDENT Director General, Department of Fair Trading FILE NUMBER: 003302 HEARING DATES: 22/11/2000 SUBMISSIONS CLOSED: 11/22/2000 DATE OF DECISION: 12/08/2000 BEFORE: Hennessy N (Deputy President) APPLICATION: Pawnbrokers & Second-Hand Dealers Act - second-hand dealers licence - impose a condition on licence - Second-Hand Dealers licence - impose a condition on licence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Pawnbrokers and Second-hand Dealers Act 1996 CASES CITED: Aguerre -v- Director General, Department of Fair Trading [1999] NSWADT 27 APPLICANT REPRESENTATION: P Doyle, solicitor RESPONDENT J Coss, solicitor ORDERS: The decision of the respondent to impose the following condition on the applicant's licence is set aside: Eralp Hassan (also known as Erald Cimen Hassan) is not to take part in the day to day operations and/or administration of the business for which this licence has been granted. Introduction 1 Alexander and Hassan Pty Ltd (the applicant company) applied to the Tribunal for a review of a decision by the respondent to grant a pawnbrokers and second-hand dealers licence subject to two conditions. The first condition was that: Eralp Hassan (also known as Erald Cimen Hassan) is not to take part in the day to day operations and/or administration of the business for which this licence has been granted. 2 The second condition related to the use of computer to create and store records. The applicant withdraw its application to the Tribunal in so far as it relates to a review of this condition. That part of the application is therefore dismissed. 3 The main reason for imposing the condition was that Mr Hassan had been convicted of a dishonesty offence in the previous 10 years, namely stealing a five speed motor vehicle gearbox, the property of unknown persons. He was fined $400 for that offence. 4 When the applicant company applied to the Department of Fair Trading for a second hand dealers licence on 11 April 2000, Mr Hassan was a director of the company. Section 8(2)(c) of the Pawnbrokers and Second Hand Dealers Act 1996 (the Act) prevents the Director General from granting a licence to a company if one of the directors of the company has been convicted of such an offence. Consequently, after discussions between an officer from the Department and Mr Hassan, Mr Hassan resigned as a director of the company and the licence was granted, subject to the condition set out above. Stay granted 5 On 13 September 2000 the Tribunal stayed the decision of the Director General imposing the condition, pending further order of the Tribunal. Jurisdiction 6 Under s 39 of the Act, the Tribunal has power to review certain decisions of the Director-General. Section 39(2) states that: A licensee whose licence has been revoked or suspended by the Director-General, or on whose licence a condition has been imposed (whether on grant or renewal of the licence or otherwise) may apply to the Administrative Decisions Tribunal for a review of the revocation, suspension or imposition. Legislation 7 Under the Act anyone carrying on the business of a pawnbroker or second hand dealer must be licensed. The then Minister for Fair Trading, Ms Lo Po', said in the Second Reading Speech introducing the Bill, at p 440 that: The Government is intent on enhancing the capacity of the Police Service to target thieves and those who trade with them and of the Department of Fair Trading to remove dishonest traders from the marketplace. 8 Removal of dishonest traders is implemented, in part, through mandatory provisions which prevent a person convicted of certain offences from obtaining a licence. Section 8(1)(d) and s 8(2)(c) are mandatory disqualification provisions. Those provisions state 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. (2) A corporation is disqualified from holding a licence if: (c) any of its directors is disqualified under subsection (1). 9 Although these disqualification provisions are mandatory, a disqualified person can apply to the Tribunal for a review of that decision. Section 8(4) states that: 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. 10 In Aguerre -v- Director General, Department of Fair Trading [1999] NSWADT 27, the Tribunal exercised its discretion pursuant to s 8(4) and set aside the Director General's decision to disqualify the applicant from obtaining a licence. 11 This case is different. The application for a licence was granted after Mr Hassan resigned as a director. A condition was placed on the licence preventing him from participating in the business. That condition was imposed pursuant to s 11 of the Act which states that: (1) A licence is subject to any conditions that the Director-General sees fit, in the public interest, to attach to it on grant or renewal or by order under section 36. Documentary evidence 12 The following documents were tendered in evidence: · affidavit of Erald Hassan dated 20 November 2000; · affidavit of Peter Doyle dated 20 November 2000; · reference from Barry Alexander dated 12/9/2000; · reference from Sash Mielczarek dated 11/9/2000; · reference from Denice Stewart dated 12/9/2000; · two references from Alex Cameron one dated 13/6/2000 and the other undated; · reference from Katrina Swann dated 5/5/2000; · Category H Firearms licence No 408011846; · Category B Firearms licence NO 408011846; · Category A Firearms licence no 408011846; · Copy of charge sheet re hearing in Local Court of Eralp Hassan re breach of s 117 of Crimes Act; and · copy of computer screen recording details of a conversation which took place on 7 June 2000. 13 The five referees listed above and Peter Doyle are business associates of Mr Hassan. Three of the six referees refer specifically to Mr Hassan's conviction. Several have known him for close to 10 years. All regard him as being of good character. Oral evidence 14 Oral evidence was given by Mr Hassan, Mr Alexander (a director of the applicant company) and Jim Jarron, operations manager, business licensing with the Department. 15 Mr Hassan prepared an affidavit dated 20 November 2000. He refers to business ventures in which he has been engaged since 1992. 16 Mr Hassan admitted that he had been convicted of stealing in 1992. (It should be noted that the charge sheet which was included in the Department's file, records the offence as stealing, rather than "goods in custody" as set out in the Statement of Reasons and Internal Review.) Mr Hassan said he bought the car in 1987 and the gear box which he was convicted of stealing was in the car at that time. He said in his affidavit that a 5 speed gear box was rare in V8 motor vehicles and this is what made the police suspicious. He said he was not particularly co-operative with the police and pleaded not guilty to the charge. Mr Hassan said he was 22 years old when the offence was committed. He is now 32 years old. 17 When applying for the licence, Mr Hassan admitted that he wrote "No" in answer to the question "Have you been convicted for any offence involving fraud or dishonesty or served a term of imprisonment in the last 10 years?" He explained this by saying that he thought that the conviction was more than 10 years old. He said he has been granted a firearms licence despite this conviction so he thought he was "OK". Mr Hassan said that he knew that the Department would check his criminal record so he was not trying to hide the existence of the conviction. 18 Mr Hassan said that the first time he heard from officers of the Department about the application for a licence was in May 2000 when he received a phone call. He said that he was told that if he resigned as a director of the company, the licence would be issued. He did resign on 16 May 2000. Mr Hassan maintains that he was never told that a condition of granting the licence would be that he could not take part in the business. 19 Mr Jarron, an officer of the Department, expressed the view that a licence could not be granted to the applicant company while Mr Hassan remained as a director. It was his decision to attach the condition to the licence. Applicant's submissions 20 The solicitor for the applicant submitted that Mr Hassan should be able to participate in the business because the offence for which he was convicted occurred some 10 years ago, it was a relatively minor offence and he has demonstrated good character since that time. It is not in the public interest to exclude such a person from the operation of the business. Respondent's submissions 21 The respondent submitted that public policy considerations mean that the condition should remain on the licence. They offered three reasons for this view: firstly if the condition was not imposed, the intention of the legislation would be thwarted; secondly Mr Hassan should not be involved in the business because he filled in the application form incorrectly and thirdly, he has been convicted of a dishonesty offence. 22 In relation to the offence, the respondent submitted that the provisions of s 8(4) are relevant in determining whether or not it is in the public interest for the condition to remain. However, Mr Coss submitted that there was insufficient information available for the Tribunal to determine whether the offence was trivial. In relation to the fine of $400, the respondent submitted that this did not indicate that the offence was trivial. 23 In relation to subsequent good behaviour of the offender, the respondent submitted that by answering "No" to the question about previous convictions on the application form, the applicant had not demonstrated good behaviour. In the respondent's view, the references tendered are "self serving and do not indicate that the authors were aware of either the conviction or the purpose for which the references were required. Reasons and Decision 24 Several issues were raised in the course of the hearing which are not set out in the evidence or in the summary of submissions because they are not relevant. Those issues include whether it would cause hardship to the business if Mr Hassan was not able to participate, whether Mr Hassan has any viable alternative career options and whether Mr Hassan, or any other person, was told that the condition would be imposed. 25 The Act provides a mechanism for the Tribunal to set aside a decision of the administrator where a person with a dishonesty offence in the previous 10 years is disqualified from holding a licence. In this case, rather than refusing to grant the application, the administrator suggested that Mr Hassan could resign as a director. A condition was then imposed on the licence excluding Mr Hassan from the business. 26 The question which the Tribunal must answer is whether the administrator has made the correct and preferable decision in imposing the condition on the licence. (See s 63(1) of the Administrative Decisions tribunal Act 1997.) The condition was imposed pursuant to s 11(1) because the administrator saw fit to impose it "in the public interest". 27 Public interest is not defined in the Act. The Act and the Second Reading speech confirm that parliament regards it as being in the public interest to prevent dishonest traders from entering the marketplace. That is the purpose of the mandatory provisions contained in s 8(1)(d) and s 8(2)(c) which are set out above at paragraph 8. The Tribunal can set aside such a disqualification if the circumstances of the case reveal that the individual in question can be trusted despite the conviction. The Tribunal should adopt a similar approach in determining whether a condition such as the one in this case, should remain. It will not be in the public interest for such a condition to remain if the person concerned can demonstrate that he or she is now honest and of good character. Several matters are relevant in making such a determination, including: the nature and circumstances of the offence, the time since the offence was committed, the behaviour of the person since that time and the likelihood of the person re-offending. 28 The applicant gave evidence about the circumstances of the offence. This version of events was not effectively challenged either by contradictory documentary evidence or in cross examination. In these circumstances, I accept the applicant's version of what happened. The offence is at the lower end of the scale of stealing offences. 29 It is now very close to 10 years since the offence was committed and over 8 years since Mr Hassan was convicted. These are significant periods of time. Mr Hassan has not been charged or convicted with any other criminal offences either before or after that time. He has conducted his own businesses for the last eight years without coming to the attention of police. He provided several references from business associates all of whom have a good opinion of his character. Given these factors, it is highly unlikely that Mr Hassan would ever commit a dishonesty offence again. 30 Mr Hassan's failed to disclose the conviction in the application form. I accept that he did not recollected the exact date on which he was convicted, however he should have made further inquiries and ensured that he provided the correct information to the Department. While it is of the utmost importance to complete applications forms such as this carefully and honestly, I do not accept that Mr Hassan was deliberately attempting to deceive the respondent. 31 For these reasons, the decision of the administrator imposing the condition on the applicant's licence is set aside. 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.