Appeal Panel - Internal CITATION: Commissioner for Fair Trading, NSW Office of Fair Trading v O'Connor (GD) [2007] NSWADTAP 37 APPELLANT PARTIES: Commissioner for Fair Trading, NSW Office of Fair Trading RESPONDENT Freda Catherine O'Connor FILE NUMBER: 079016 HEARING DATES: 2 July 2007 SUBMISSIONS CLOSED: 2 July 2007 DATE OF DECISION: 26 July 2007 BEFORE: Handley R - Acting Deputy President; Higgins S - Judicial Member; Blake C - Non Judicial Member CATCHWORDS: Application for Real Estate Agent's licence - whether disqualified - whether a fit and proper person - excercise of discretion - error of law - irrelevant considerations - adequacy of reasons MATTER FOR DECISION: Principal matter FILE NUMBER UNDER APPEAL: 063052 DATE OF DECISION UNDER APPEAL: 02/06/2007 Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Licensing and Registration (Uniform Procedures) Act 2002 Property Stock and Business Agents Act 2002 Collector of Customs v Pozzolanic (1993) 43 FCR 280 CASES CITED: Eleter v Director-General, Department of Fair Trading [2002] NSWADT 138 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 YG & GG v Minister for Community Services [2002] NSWCA 247 APPELLANT R Henderson of counsel instructed by the NSW Office of Fair Trading REPRESENTATION: RESPONDENT P Skinner of counsel instructed by Anoni Wright, solicitors ORDERS: The Tribunal's decision dated 6 February 2007 is affirmed. REASONS FOR DECISION 1 On 28 March 2007, the Commissioner for Fair Trading ('the Commissioner') appealed against the decision of the Tribunal dated 6 February 2007 to remit to the Commissioner for reconsideration the Commissioner's decision to refuse Ms O'Connor's application for a licence under the Property, Stock and Business Agents Act 2002 ('the Act'). Background 2 On 22 July 2005, the Office of Fair Trading ('the OFT') received an application from the respondent in this appeal, Ms O'Connor, for an individual licence as a business agent, real estate agent, buyer's agent, strata managing agent, and stock and station agent. In this application, Ms O'Connor answered 'No' to question 10, "Have you been convicted in NSW or elsewhere of ANY offence that was recorded in the last 10 years?" 3 By letter dated 9 August 2005, a delegate of the Commissioner responded that Ms O'Connor did not seem to meet the eligibility requirements for a licence as a business agent, stock and station agent, and strata managing agent, and requested further information. 4 A routine enquiry made by the OFT with the NSW Police revealed that on 22 March 2004, Ms O'Connor was convicted of two counts of obtaining money by deception at Cootamundra Local Court, as a result of which she was placed on a 12 month good behaviour bond and ordered to pay restitution of $2,074.10 to the victim. The Bond signed by Ms O'Connor on 22 March 2004 stated: "The Local Court has convicted the offender of the above offence(s) but has not imposed a sentence, instead the offender is released upon entering into this bond." 5 When the OFT brought these offences to her attention, Ms O'Connor sent a fax to the OFT on 20 October 2005 stating that the offences involved amounts being charged to the wrong credit card when she was: "in ill health and under tremendous stress whereby the magistrate said it would not affect my real estate licensing in Vic, NSW as the local Police placed me in a difficult position by contradicting my verdict, as it was merely an oversight on the card number mix up ..." 6 By letter dated 26 October 2005, a delegate of the Commissioner refused Ms O'Connor's application pursuant to s 18(1)(b) of the Licensing and Registration (Uniform Procedures) Act 2002. The delegate determined that the offences committed by Ms O'Connor and recorded in the last 10 years, which involved dishonesty, should not be ignored because insufficient time had passed since the offence was committed, and the act or omissions giving rise to the offence were not considered trivial. Consequently, Ms O'Connor was a 'disqualified person' under the Act. Moreover, because of her conviction and because she did not disclose the conviction on the licence application form, she was not considered to be a fit and proper person to hold a licence. 7 Ms O'Connor requested an internal review of this decision. On 22 November 2005, another delegate of the Commissioner, having completed an internal review, affirmed the decision. On 16 February 2006, the Tribunal received Ms O'Connor's application for a review of this decision. 8 The Tribunal conducted a hearing on 6 February 2007, at the conclusion of which the Judicial Member gave an ex tempore (oral) decision. He identified two issues for determination: first, whether Ms O'Connor has a conviction for an offence involving dishonesty and, if so, whether that offence should be ignored; and, second, whether she was a fit and proper person to hold a licence. The Relevant Legislation 9 Section 8(1) of the Act provides that a person must not act as a real estate agent unless the person holds a real estate agent's licence. Section 14(1) states relevantly: (1) A natural person is eligible to hold a licence only if the Director-General is satisfied that the person: (a) ... (b) is a fit and proper person to hold a licence ... (c) ... (d) is not a disqualified person, and (e) ... (2) Section 16(1) states relevantly: (3) A person is a disqualified person for the purposes of this Act if the person: (a) has a conviction in New South Wales or elsewhere for an offence involving dishonesty that was recorded in the last 10 years, unless the Director-General has determined under subsection (2) that the offence should be ignored, or ... (4) The Director-General may determine that an offence committed by a person should be ignored for the purposes of this section 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. 10 Section 18(1)(b) of the Licensing and Registration (Uniform Procedures) Act 2002 empowers the Director-General to make a decision refusing an application for a licence. Tribunal Reasons 11 In the ex tempore statement of reasons for his decision, the Judicial Member found that Ms O'Connor did have a conviction for an offence involving dishonesty, and therefore turned to consider whether the discretion in s 16(2) of the Act should be exercised. He said: "There is a period of a bit under four years since the offence was committed. I accept the offence went on for quite a long time, a year or so, prior to the final instalment. So it is close to five years since the initial offence." 12 The Judicial Member referred to the decision in Eleter v Director-General, Department of Fair Trading [2002] NSWADT 138 ('Eleter'), where in the case of a pawnbroker, the Tribunal decided that four years and four months since a conviction for receiving stolen goods was an insufficient time to have elapsed, but, nevertheless, decided to exercise its discretion to ignore the conviction. In the present matter, the Judicial Member found that the material before him was comparable to that in Eleter. 13 The Judicial Member also noted that the Act is for the protection of consumers and for the benefit of the industry as a whole, rather than being punitive in nature. 14 Referring to the evidence before him, the Judicial Member stated: "The evidence that I have against Ms O'Connor is the conviction for which she pleaded guilty. The circumstances in which she pleaded guilty I think are relevant, in that she had just signed herself out of hospital and her evidence is that she was in poor health on that day. So while I think it is understandable that in those circumstances she may not have been focussing on the wording of the document that she was signing, I think that that is a separate issue. What I am inclined to do here is to exercise a discretion under s 16(2). I think that that should be done taking into account the purpose of the legislation as being protective. I have taken into account what Ms O'Connor has done since these offences. She has obviously undertaken study and gone to some efforts to improve her position. It is a single incident, there is no other times [sic] in which she's come to the attention of the police or the courts. I have quite a lot of references in her favour and I think the risk to consumers if she were to have that discretion exercised in her favour is probably not great. So that being the case I would exercise the discretion and determine that the offence should be ignored for the purposes of the section. As for the fit and proper issue, I think the evidence in her favour outweighs the evidence against her. So I do not think there is an issue there of fitness and propriety. Where it leaves me is I am inclined to refer this back to the Commissioner to reconsider it in light of the material that has been provided, the fact that she is no longer pursing [sic] licences, other than the real estate licence. I have not been through to weigh up whether they are the appropriate qualifications or not and I think the Commissioner is in a better position to do that. The matter is referred back for reconsideration by the Commissioner with a recommendation that if Ms O'Connor has satisfied all the other requirements for the licence, then the licence should be granted." Submissions 15 The Commissioner identifies eight grounds in the written notice of appeal, all involving errors of law: the first five grounds relate to the Judicial Member's exercise of the s 16(2) discretion, the sixth and seventh grounds relate to the Judicial Member's finding that Ms O'Connor was a fit and proper person (s 14(1)(b)) and, in the eighth ground, the Commissioner contends that the Judicial Member erred by arriving at a decision that cannot reasonably be supported on the evidence. Leave was not sought to extend the appeal to the merits of the decision under review. Exercise of the s 16(2) discretion 16 The first three grounds of appeal contend that the Judicial Member took into account irrelevant considerations in making his decision: first, "'what Ms O'Connor has done since these offences' including her apparent 'good behaviour'"; second, "the risk to consumers"; and, third, the "circumstances in which she pleaded guilty ... in that she had just signed herself out of hospital and her evidence is that she was in poor health on that day". 17 Ms Henderson, for the Commissioner, submitted that each of these three considerations was irrelevant in exercising the s 16(2) discretion. Section 16(2) provides an exhaustive list of factors to be taken into consideration when determining whether an offence should be ignored: the time that has passed since the offence was committed, and the triviality of the acts or omissions giving rise to the offence. 18 Ms Henderson submitted that a consideration of the passage of time should not involve consideration of what the person has done in the meanwhile. This is a matter to be considered in relation to fitness and propriety. She also noted that s 16(2) contains no specific reference to the risk to consumers, although she acknowledged that the objects of the Act may inform consideration of the triviality of the offence. However, the Judicial Member did not address the question of triviality – another indication that the Member's reasoning process was flawed. 19 Mr Skinner, for Ms O'Connor, noted that what is a 'relevant' or 'irrelevant' consideration "must be determined by construction of the statute conferring the discretion": Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, at 40 (per Mason J). In terms of s 16(2) of the Act, a consideration of the passage of time since the offence was committed inevitably involves looking at what the person has done in that time. Thus, what Ms O'Connor has done in the interim is not an irrelevant consideration. Consumer protection is also of relevance in this context. With regard to the circumstances in which Ms O'Connor pleaded guilty, these are relevant in terms of the conduct giving rise to the offence. 20 The fourth ground of appeal is that the Judicial Member failed to take into account a relevant consideration, namely, Ms O'Connor's second offence of obtaining money by deception which occurred on or about 28 February 2003. The Commissioner pointed to the Judicial Member's Statement of Reasons where in a number of instances he referred to Ms O'Connor having been convicted of an 'offence' and to a 'conviction' – ie to 'offence' and 'conviction' in the singular – whereas on 22 March 2004 she was in fact convicted of two offences of obtaining money by deception, in relation, first, to the use of an AMEX credit card between 28 July 2002 and 28 March 2003 to pay monthly AXA Health Insurance policy payments by direct credit to AXA Health Australia Pty Ltd, and, second, to the use of the card on 28 February 2003 to pay for goods ordered from Time Life Australia Pty Ltd. 21 Mr Skinner noted that the use of the singular 'offence' by the Judicial Member might be merely a reflection of the use of the singular in the wording of the Act. Moreover, there are instances of the Judicial Member using the plural (Statement of Reasons, p 3): "I have taken into account what Ms O'Connor has done since these offences." The Judicial Member had evidence of both offences before him. 22 The fifth ground is that the Judicial Member misdirected himself by treating the circumstances of Ms O'Connor's case as comparable with those in Eleter. In Eleter, the relevant provisions of the applicable Act in relation to the exercise of the discretion to ignore an offence committed by the person, referred not only to the triviality of the acts or omissions giving rise to the offence and the time that has passed since the offence was committed, but also, unlike s 16(2) of the Act, to "the subsequent good behaviour of the offender" and "any other ground prescribed by the regulations". The Commissioner submitted that the Judicial Member had mistakenly transposed "the subsequent good behaviour of the offender" into the considerations to be taken into account in s 16(2). 23 Mr Skinner contended that the circumstances of Eleter and the current matter are 'comparable'. The Judicial Member did not say they were the same. Both matters involved dishonesty, to which the applicants pleaded guilty, where questions arose as to the understanding of the applicants in doing so. Fitness and propriety 24 The sixth ground of appeal is that the Judicial Member failed to give adequate reasons, as required by s 89(5) of the Administrative Decisions Tribunal Act 1997 ('the ADT Act') for his finding that Ms O'Connor is a fit and proper person pursuant to s 14(1)(b) of the Act. The Commissioner submitted that the Judicial Member dealt with this issue in just two sentences, as follows: "As for the fit and proper issue, I think the evidence in her favour outweighs the evidence against her. So I do not think there is an issue there of fitness and propriety." 25 Section 89(5) of the ADT Act requires the Tribunal's written reasons to set out the following: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusion it made. 26 The Commissioner submitted that an aggrieved person reading the decision would not be able to ascertain the basis for the Judicial Member's finding on fitness and propriety. There was a clear delineation in how the Member addressed the issues in his Statement of Reasons. 27 Mr Skinner said the Judicial Member's two sentences, quoted above, need to be read in the context of the preceding paragraphs where the Judicial Member stated: "I have taken into account what Ms O'Connor has done since these offences. She has obviously undertaken study and gone to some efforts to improve her position. It is a single incident, there is no other times in which she's come to the attention of the police or the courts. I have quite a lot of references in her favour and I think the risk to consumers if she were to have that discretion exercised in her favour is probably not great." 28 This was sufficient as an explanation as to why the Judicial Member considered Ms O'Connor to be a fit and proper person. It should also be remembered that this was an ex tempore decision. Such decisions are often characterised by their brevity and should not be picked through line by line. 29 The seventh ground is that the Judicial Member failed to take into account a relevant consideration, namely, Ms O'Connor's failure to disclose her convictions in her application for a licence. Ms Henderson noted that by pleading guilty to the offences, Ms O'Connor was admitting to a guilty mind (mens rea). Ms Henderson also noted that some of the evidence given by Ms O'Connor was incorrect. For example, there is no evidence that Ms O'Connor was admitted to hospital on the night of 2/3 April 2004. The Cootamundra Hospital Accident and Emergency Records (which were admitted into evidence) does, however, show that Ms O'Connor attended on 2, 3 and 4 April 2004 to have her blood sugar level checked and to discuss the diagnosis of diabetes. 30 Mr Skinner contended that Ms O'Connor answered question 10 in the application according to her belief at the time. He referred to Ms O'Connor's understanding of the conviction. In her statement dated 11 September 2006, Ms O'Connor stated that she presumed from the comments of the Magistrate and her barrister that a conviction had not been recorded and that all she was required to do was to pay the outstanding sum to the victim and be of good behaviour. (See also Ms O'Connor's fax dated 20 October 2005.) Her evidence was that she was unwell at the time. Decision not supported by the evidence 31 With regard to the eighth ground of appeal, that the Judicial Member erred by arriving at a decision that cannot reasonably be supported on the evidence, Mr Skinner rejected this. He said there was a great deal of evidence before the Judicial Member, who addressed the relevant matters in his decision. Discussion and Findings 32 In this matter, the Judicial Member notified the parties of the decision and his reasons orally at the conclusion of the hearing. A slightly modified version of the transcript of this part of the hearing was subsequently provided to the Commissioner in response to a request for a statement of reasons under s 89(3) of the ADT Act, and as permitted by s 89(4). In our view, it must be borne in mind that reasons for the decision were given orally, and it will often be the case that such reasons will be more briefly stated and not have the same level of finesse that would ordinarily characterise a statement of reasons for a reserved decision. However, transcribed oral reasons must still comply with s 89(5), that is they must set out (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, and (c) the reasoning processes that lead the Tribunal to the conclusion it made. Failure to provide adequate reasons is an error of law if it can be shown the Tribunal has failed to exercise its jurisdiction in accordance with law: YG & GG v Minister for Community Services [2002] NSWCA 247, at par 37 – par 38. 33 When reviewing the adequacy of a statement of reasons, it should be remembered that the Tribunal is not a court, that it is not bound by the rules of evidence (s 73(2) of the ADT Act), is to act with as little formality as the circumstances of the case and fairness permit (s 73(3)), and "is to act as quickly as practicable" (s 73(5)). It follows, as the Full Federal Court recognised in Collector of Customs v Pozzolanic (1993) 43 FCR 280, at 287, that: "The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error." Exercise of the section 16(2) discretion 34 The first three grounds of appeal contend the Judicial Member took into account irrelevant considerations in making his decision to exercise the s 16(2) discretion, and the fourth ground contends that he failed to take into account a relevant consideration. In our view, the construction of s 16(2) exhaustively states the factors to be taken into account in determining whether an offence should be ignored. We note that only two factors are listed: "the time that has passed since the offence was committed", and "the triviality of the acts or omissions giving rise to the offence". In this regard, the provision is different from the relevant legislative provision in Eleter, which, in addition, also lists as relevant factors "the subsequent good behaviour of the offender" and "any other ground prescribed by the regulations". We also note that the wording of s 16(2) - "the triviality of the acts or omissions giving rise to the offence" - invites an examination of the conduct of the person at the time the offence was committed. 35 The Judicial Member had regard to the time that had passed since the offence was committed, noting that the offending conduct "went on for quite a long time, a year or so, prior to the final instalment". He found that "close to five years" had passed since the first wrongful payment was made using the card on 28 July 2002, and "a bit under four years" since the final wrongful payment on 28 March 2003. Evidence of both offences was before the Tribunal. We note that the credit card payments to AXA Health Insurance took place monthly during this period, and these were the subject of the first offence. The second offence occurred on 28 February 2003, when Ms O'Connor used the AMEX credit card to pay for goods ordered from Time Life. Thus, the Judicial Member made no error in terms of the time span, although he did not specifically refer to what we assume should have been the second offence at this stage. However, on p 3 of his decision he referred to what Ms O'Connor had done "since these offences". We read the Judicial Member's reference to a "single incident" on p 3 as meaning a single occasion when she has come to the attention of the police or the courts, which is correct. 36 We note that in s 16(1)(a) and s 16(2) of the Act, 'offence' is referred to in the singular. Moreover, the internal review decision letter dated 22 November 2005 and the decision letter dated 26 October 2005 both refer to 'offence' in the singular. We are not, therefore, satisfied that the Commissioner has made out the fourth ground of review, that the Judicial Member failed to take into account a relevant consideration, namely Ms O'Connor's second offence. 37 With regard to the first ground, and the Judicial Member's reference on p 3 to what Ms O'Connor had done since these offences, in our view, taking into account what Ms O'Connor has done in the interim is materially different from taking into account the passage of time since the offence was committed or the triviality of the acts or omissions giving rise to the offence. Thus, the Judicial Member did take into account an irrelevant consideration and did, therefore, make an error of law. However, we consider that the Judicial Member also took into account the relevant factors – passage of time and triviality – and, in this instance, the error of law would not have had any effect on the outcome and is not sufficient to justify setting aside the decision. 38 With regard to the second ground of appeal, the Judicial Member's reference on p 3 to "the risk to consumers", we agree with Ms Henderson (par 19, above) that the objects of the Act may inform consideration of the triviality of the offence. In our view, the Judicial Member's references on p 3 of his reasons to the purpose of the Act being protective, and to the risk to consumers if the s 16(2) discretion is exercised in Ms O'Connor's favour, were principally directed to his consideration of the triviality of the offence. Thus, we do not consider this as the taking into account of an irrelevant consideration. 39 With regard to the third ground of appeal, the Judicial Member's consideration of the circumstances in which Ms O'Connor pleaded guilty, we note that this discussion occurs at the top of p 3 of the statement of reasons, following reference to the decision in Eleter and to the circumstances of the offence. In our view, it is reasonably clear that at this point the Judicial Member was addressing himself to the issue of the "triviality of the acts or omissions giving rise to the offence". As stated above, this requires an examination of the conduct of the person at the time the offence was committed. In the particular circumstances of this case, we do not consider it unreasonable for the Judicial Member to have taken a broad view of his prescription by encompassing Ms O'Connor's evidence as to the circumstances in which she pleaded guilty which, we consider, have a specific bearing on the triviality of the offences. Thus, we reject the third ground of appeal. 40 The fourth ground of appeal we have rejected at par 37, above. 41 The fifth ground of appeal contends that the Judicial Member misdirected himself by treating the circumstances of Ms O'Connor's case as comparable with those in Eleter. A comparison of that case with Ms O'Connor's reveals a number of similarities: both involved licensing applications by applicants who had been convicted of offences involving dishonesty, where the protection of the consumer was an important objective. In Eleter, the factors to be taken into account in deciding whether to exercise the discretion to ignore an offence, in addition to the two grounds in s 16(2) of the Act, included "the subsequent good behaviour of the offender" and "any other ground prescribed by the regulations". In Ms O'Connor's case, in the context of the Judicial Member's discussion of the passage of time since the offences were committed and the issue of triviality, his comment that "[t]he material that I have in this case is comparable to that in Eleter in significant respects", does not, in our view, constitute his misdirecting himself. We therefore reject this ground of appeal. Fitness and propriety 42 The sixth ground of appeal is that the Judicial Member failed to give adequate reasons for his finding that Ms O'Connor is a fit and proper person. In our view, the Judicial Member discussed the relevant material facts and set out his reasoning relevant to this issue in the course of his discussion of the s 16(2) discretion, especially in the middle of p 3 of his decision. Clearly, it would have been preferable had his reasons been better ordered. However, in the light of this being an ex tempore decision, we consider his reasons on this issue were adequate. 43 The seventh ground of appeal is that the Judicial Member failed to take into account Ms O'Connor's failure to disclose her convictions in her licence application. We note the parties' submissions on this issue. The Judicial Member referred to the circumstances in which Ms O'Connor pleaded guilty, her health on that day, and the fact that "she may not have been focussing on the wording of the document she was signing" (presumably the Bond signed on 22 March 2004 – see par 4, above), as a separate issue from the evidence of her conviction. Ms O'Connor contended that her lack of understanding of what she was signing, in the context of comments made to her by the Magistrate and her counsel, was responsible for her presuming that no conviction had been recorded against her. Again, in the light of this being an ex tempore decision, we consider the Judicial Member did take into account Ms O'Connor's non-disclosure of her convictions, and adequately addressed this issue in his reasons. We therefore reject this ground of appeal. Decision not supported by the evidence 44 The eighth and final ground of appeal is that the Judicial Member erred by arriving at a decision that cannot reasonably be supported on the evidence. We reject this. In our view, there was ample evidence to support the specific findings arrived at by the Judicial Member and his decision as a whole. We reiterate that while acknowledging the statement of reasons for the decision was brief and not as well ordered as would have been preferable, it was, in the circumstances, adequate, and there is nothing to indicate that the Judicial Member did not exercise his discretion fairly and lawfully in determining the application. 45 The Commissioner having failed to satisfy us that we should interfere with the Judicial Member's decision, his decision at first instance must be affirmed. Decision The Tribunal's decision dated 6 February 2007 is 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.