CITATION: Doyle v Commissioner of Police [1999] NSWADT 84 DIVISION: General APPLICANT: Benjamin John Doyle RESPONDENT: Commissioner of Police FILE NUMBER: 993019 HEARING DATES: 06/04/1999 SUBMISSIONS CLOSED: 06/04/1999 DATE OF DECISION: 8 September 1999 K P O'Connor, DCJ - President BEFORE: PRIMARY LEGISLATION: Security Industry Act 1997 APPLICATION: Review of a decision to refuse to issue a security industry licence - Classification of offence Validity of Regulation MATTER FOR DECISION: Principal matter Applicant: G Burton of counsel REPRESENTATION: Respondent: G Doherty, solicitor, Commissioner of Police ORDERS: 1. Application dismissed. 1 The applicant seeks review of a decision by the Commissioner of Police to refuse him a Class One licence under the Security Industry Act 1997 (the Act) because the applicant has been convicted of a prescribed offence involving fraud, dishonesty or stealing within the last ten years. Under the Act, s 16(1)(a), the Commissioner in these circumstances has a duty to refuse. 2 On the face of it the case is like many the Tribunal has dealt with where the conviction would appear to fall into the relevant prescribed category (see s 16(1) of the Act and cl 11(d) of the Security Industry Regulation 1998 (the Regulation)). In Bourke v Commissioner of Police [1998] NSWADT 1 (Gen Div, 17 December 1998), I adopted the reasoning of the Court of Appeal in Commissioner of Police v Wilson (unreported, 29 July 1994), which construed similar provisions in the Firearms Act 1989. I held that the Tribunal's function in relation to mandatory refusals was limited to re-examining whether the objective facts upon which the administrator relied in exercising its discretion had been established. 3 In cases of the present kind two steps are usually involved in establishing the objective facts - being satisfied that the old criminal record relied upon is accurate, and being satisfied that the conviction (or proven offence) recorded falls within the parameters of the categories prescribed for mandatory refusal of an application. 4 In this case the administrator's notice to the applicant of its decision to refuse his application for a licence, delivered on 17 December 1998, referred to the applicant's conviction at Coffs Harbour Local Court on 24 November 1995 for an offence under s 178BB of the Crimes Act 1900. The offence was that of making a false statement recklessly with intent to obtain financial advantage. The maximum penalty is five years' imprisonment. He was convicted and fined $200. He appealed unsuccessfully to the District Court. 5 He applied for internal review of the administrator's decision. In that application he said that the offence related to his failure to pay on departure a motel bill of $25.00. He said that he contacted the motel soon afterwards to make arrangements to pay the bill, but that the manager continued to press charges. 6 His application to the administrator for internal review was unsuccessful. He lodged an application for review with the Tribunal on 21 January 1999. 7 The applicant's record is otherwise unblemished, the conviction is a minor one and he has a history of several years' stable employment in the industry, supported by a number of positive references. He has risen quickly to the position of company manager, and has been responsible for providing security to visiting heads of state, film stars and the like. Broadly similar characteristics have been present to no avail in many of the unsuccessful applications that have come before the Tribunal. 8 The applicant through his legal representatives has made several submissions as to why the position adopted by the Tribunal in earlier cases should not continue to apply. The Tribunal has considered written submissions on behalf of the applicant filed on 25 May 1999 and the administrator's submissions in reply filed 1 June 1999, as well as oral submissions made at hearing on 4 June 1999 and further written submissions provided by counsel for the applicant after the close of the hearing. 9 The applicant made three alternative submissions: (i) that the offence in question did not fall within cl 16 of the regulation as it was not one relating to "fraud, dishonesty or stealing" (ii) that cl 16 of the regulation was made beyond the power conferred by s 11 of the Act, i.e. it was ultra vires, and accordingly the decision taken under it was invalid (iii) that I erred in Bourke's case and that the Tribunal did have a discretion open to it to exercise in relation to refusals of the present kind. 10 I now turn to these submissions. (i) that the offence in question was not one relating to "fraud, dishonesty or stealing" 11 The relevant offence provision, s 178BB, provides: " Obtaining money etc by false or misleading statements 178BB. Whosoever, with intent to obtain for himself or herself or another person any money or valuable thing or any financial advantage of any kind whatsoever, makes or publishes, or concurs in making or publishing, any statement (whether or not in writing) which he or she knows to be false or misleading in a material particular or which is false or misleading in a material particular and is made with reckless disregard as to whether it is true or is false or misleading in a material particular shall be liable to imprisonment for 5 years. " 12 The essential argument of the applicant is that the offence under s 178BB for which the applicant was convicted does not fall, strictly construed, into the prescribed category of "fraud, dishonesty and stealing". It is said that an offence founded on reckless disregard for the truth or falsity of a statement does not require proof of actual dishonesty. It is argued that a strict approach to construction should be adopted because of the "draconian" consequences (as I described them in Bourke's case) that can attach to being convicted of an offence attracting mandatory refusal. 13 The categories prescribed in each paragraph of cl 11 of the regulation are expressed in general terms. The usual pattern is for a broad category of offences to be identified and then some limits are set, for example by confining the category to those offences where the penalty actually imposed was above a specified amount. For example in the case of "an offence … involving an assault of any description" offences incurring a fine of less than $200 are not covered. In the present instance a different approach has been adopted with the category limited to exclude offences where the maximum penalty (rather than the penalty actually imposed) provides a limit. So in the present instance the category of offences involving fraud, dishonesty or stealing that are caught are those "in respect of which the maximum penalty is … imprisonment for 3 months or more". 14 A reasonable approach should be adopted to determining whether a specific offence can properly be described as one involving "fraud, dishonesty or stealing". These are all offences involving the deprivation of someone else's property with some requisite intent. It would, I consider, be artificial to sub-divide this group of offences as between those that depended on proof of a positive criminal intent as against an intent based on reckless disregard for the consequences of conduct (as to which, see Smith [1982] 7 A Crim R 437 (Victorian Court of Criminal Appeal) and Stone's case (1955) 56 SR (NSW) 25). Whether the intent is actual or founded on reckless disregard for the consequences, it is reasonable, I consider, to describe the conduct involved as "dishonest". 15 Further support is provided by the standard definitions. "Dishonest" is defined in the Macquarie Dictionary (1st ed. 1981) as "1. Not honest; disposed to lie, cheat or steal … 2. Proceeding from or exhibiting lack of honesty; fraudulent." The kind of conduct to which s 178BB of the Crimes Act is addressed would, I consider, be ordinarily regarded as conduct "proceeding from or exhibiting a lack of honesty". One of the meanings of "dishonesty" given in the Australian Concise Oxford Dictionary (1987) is "deceitfulness". 16 The applicant's argument is rejected. (ii) that the decision was invalid because cl 16 of the regulation was made beyond the power conferred by s 11 of the Act (ultra vires) 17 The submission by the applicant is that cl 11(d) does not conform to the head of power found in s 16(1)(a) of the Act. That paragraph provides: " (1) The Commissioner must refuse to grant an application for a licence if the Commissioner is satisfied that the applicant: (a) has, within the period of 10 years before the application for the licence was made, been convicted in New South Wales or elsewhere of an offence prescribed by the regulations, whether or not the offence is an offence under New South Wales law…". 18 The applicant argues that it is not permissible for the regulations simply to identify general categories of offence. He argues that the requirement that "an offence" to which the duty attaches be "prescribed by the regulations" requires the regulations precisely to identify specific offences. 19 Role of Merits Review Tribunal in relation to Objections as to Validity: Before turning to this argument it is necessary to consider whether the Tribunal is entitled on an application for review to examine the underlying lawfulness of an administrator's decision. Is the Tribunal's role simply to consider the merits of the decision under review, accepting for this purpose that the statutory scheme is itself lawful? Can an application for review be used to mount a challenge to the validity of a statute or the validity of regulations? 20 Clearly a tribunal can be distracted from its main task of dealing with the merits of a decision if it is called on to deal with collateral challenges to the underlying validity of the decision. It may be that on occasions where an objection to underlying validity is made, the Tribunal should adjourn and give the opportunity to the parties to seek judicial review to have the matter authoritatively decided. 21 But such a course of action would contribute to delay in finalising the matter and may be detrimental to the interests of an applicant raising such an objection where the tribunal proves to be disposed to the applicant on the merits. 22 In any event, the function of this Tribunal when sitting in its review jurisdiction is to make the "correct and preferable decision": Administrative Decisions Tribunal Act 1997 (the Tribunal Act), s 63. It might be said therefore that a primary decision would be incorrect if it were invalidly made. Similarly it might be said that a review decision could not be said to be correct if, in law, the decision was affected by fundamental invalidity. 23 The extent of a merits review tribunal's jurisdiction to inquire into questions relating to validity has been examined in some detail in relation to the work of the Commonwealth Administrative Appeals Tribunal (AAT). 24 The issue was addressed early in the life of that Tribunal by the founding President, Brennan J, sitting at first instance, in this way: "… administrative action which exceeds the power conferred is not only ineffective in point of law, but it constitutes unacceptable administrative conduct. An administrator who does not have the power to take the administrative action he thinks appropriate, or who fails to observe the conditions which are essential to the valid exercise of his power, cannot act in excess of his powers and justify that course as administratively expedient … Part of the Tribunal's function in securing sound administration consists in confining the administrator to the powers conferred upon him and to the lawful mode of exercising those powers; and the effectiveness of the Tribunal's function would be grievously weakened if it were impotent to check excesses of power. … It seems absurd that immunity from review would be secured by proof that the decision-maker's exercise of power so far miscarried as not to be a valid exercise of the power at all." (Re Brian Lawlor Automotive Pty Ltd and Collector of Customs (1978) 1 ALD 167 at 177-178; affirmed Collector of Customs v Brian Lawlor Automotive Pty Ltd (1979) 2 ALD 1 (Fed Ct (Bowen CJ, Smithers J;Deane J dissenting).) 25 In a journal article AAT Deputy President Hall noted in relation to the Federal Court proceedings that while Deane J had disagreed with the majority on one point the Court was unanimous as to the existence of some jurisdiction to inquire into underlying validity: "In many respects the most important aspect of Brian Lawlor was the unanimous view of the Federal Court that administrative decisions made in the "colourable exercise" of a power are reviewable before the AAT. … The Tribunal, and more importantly, the parties were thus spared the sterile and technical legal task of determining as a pre-condition to the exercise of the Tribunal's review jurisdiction, that the decision under review was lawfully made and was not, on some ground relevant to the supervisory jurisdiction of the courts, a nullity." (Hall, "Judicial Power, the Duality of Functions and the Administrative Appeals Tribunal (1994) 22 Fed LR 15 at 41) 26 In light of Lawlor's case, the AAT has been prepared to inquire into such questions as conformity with the requirements of natural justice, want of jurisdiction and taking into account irrelevant considerations (see for example Re Reith and Minister of State for Aboriginal Affairs (1988) 14 ALD 430) as well as in relation to attempts to prevent administrative review (see for example Secretary, Department of Social Security v Alvaro (1994) 34 ALD 72; and see the Tribunal Act, s 6(2) to (4)). Another example would be the need to prove the possession of valid delegation where the administrator's decision is made by a delegate. 27 But this preparedness on the part of the Commonwealth Administrative Appeals Tribunal is subject possibly to two exceptions. A merits review tribunal may not be competent to examine a question as to the constitutional validity of a statute: as to which compare dicta of Brennan J (President) supporting competence in Re Adams and The Tax Agents Board (1976) 12 ALR 239; 1 ALD 251 with the contrary view of the commentary in Australian Administrative Law (Butterworths 1999) at [223] and Hall, cited above, at 43. Because of the nature of the Commonwealth Constitution such a question has a greater potential to arise in the setting of a Commonwealth tribunal than is the case in a State tribunal. The other possible exception relates to the question presently under consideration, the validity of subordinate legislation. 28 In Re Castello and Secretary, Department of Transport (1979) 2 ALD 934 the Administrative Appeals Tribunal said at 939: " Courts have traditionally exercised the power to declare delegated legislation invalid where, in the process of adjudicating upon private rights and duties, it becomes necessary to determine whether the maker of delegated legislation has exceeded his delegated authority (see Pearce on Delegated Legislation, p 92 para 216 and cf Wynes on Legislative Executive and Judicial Powers in Australia, 5th edn p 31). But this Tribunal can give no binding and authoritative decision on such a question (cf Huddart Parker Pty Ltd v Moorhead (1909) 8 CLR 330 at 357 per Griffith CJ). If it be the case that the Tribunal has the competence nevertheless, to form an opinion on the validity of the Air Navigation Orders, the formation of that opinion is (to adopt the language of the President in [Re Adams and the Tax Agents Board, (1976) 12 ALR] at 245) "merely a means which the administrative body may adopt in moulding its conduct to accord with the law". Before this Tribunal, as an administrative body, could determine to mould its conduct by treating delegated legislation as invalid, there would, in our view, need to be the most compelling grounds to justify it in so doing. Indeed, in the unlikely event of such a case arising, the Tribunal would need to consider most carefully how it should proceed (cf Zimmax Trading Co Pty Ltd and Collector of Customs (1979) 2 ALD 120.) But this is not such a case. The submissions, as presented by the applicant, do not in our view raise any grounds of substance for calling into question the validity of the colour perception standard in Air Navigation Order 47.3. We have concluded, therefore, that there is no proper basis upon which we should consider those submissions further." 29 Smithers J cautioned in Lawlor's case at 21 that "the [Administrative Appeals] Tribunal's charter for uncomplicated review" should be maintained. If collateral reviews going to validity were to be readily entertained: "Traps and ambushes would characterise the operations of the Tribunal in a most embarrassing way". 30 But in Re Jonsson and Marine Council (No 2) (1990) 12 AAR 323 the Administrative Appeals Tribunal did proceed to deal with the issue of the validity of subordinate legislation. In that case a seaman sought review of a Marine Council decision to declare him unsuitable for engagement as a seaman after he had pleaded guilty to assaulting the chief steward of his ship. The relevant legislation conferred a discretion on the Marine Council which was to be exercised "in accordance with prescribed principles". The relevant regulation provided that "where it was established that a person … (i) has inflicted violence causing actual bodily harm on another person … the person is taken to be unsuitable for engagement as a seaman". It can be seen that the relevant regulation, through the use of the words "taken to be", purported to convert a discretionary power to one to be exercised automatically. No principles guiding the exercise of discretion were enunciated. 31 In these circumstances the Tribunal was satisfied that the regulation was ultra vires and the Marine Council had acted incorrectly. It set aside the decision. 32 Like the administrator making the primary decision, a review tribunal must satisfy itself that it is seized of a matter over which it has jurisdiction. In instances where the decision is made having regard to criteria contained in subordinate legislation, the tribunal would (like an administrator) ordinarily proceed on the basis that the subordinate legislation has been regularly made and is intra vires the governing statute. 33 I agree with the general view expressed in Re Castello that there would need to be "most compelling grounds" for treating subordinate legislation as invalid. Re Jonsson does, I consider, represent such a case, where the regulation, contrary to the governing statute, did not illuminate but instead sought to prevent the exercise of discretion by the primary decision-maker. 34 As noted by Hall, op cit at 46, the High Court's decision in Re Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 lends support to the view that there may be circumstances in which an administrative tribunal or inquiry should satisfy itself as to the validity of subordinate legislation before determining that it is bound by it. In that case the commissioner responsible for an aboriginal land claims inquiry had declined to examine the validity of a regulation. The governing legislation excluded "town" land from the scope of the inquiry. After the inquiry had begun the government made a planning regulation extending considerably the boundaries of the town of Darwin. The High Court held (5-1) that the commissioner had jurisdiction to entertain a claim that the relevant regulation was invalid because it was made for the ulterior purpose of removing a significant area of land from the reach of the land rights claim. 35 My conclusion is that this Tribunal should only proceed to examine closely the validity of subordinate legislation where a compelling case can be demonstrated by the applicant rather than one that is merely arguable. Re Jonsson and Re Toohey provide useful analogies in seeking to define that boundary. This Tribunal should not become the forum for the pursuit of objections that are merely arguable. These should be left to judicial review proceedings. (See generally, McMillan, "Merit Review and the AAT: A Concept Develops" in The AAT: Twenty Years Forward (AIAL, 1998) 32 at 35-41.) 36 In the present case, the Act permits regulations to be made prescribing offences which may be the subject of mandatory licence refusals. The regulations have adopted the course of describing the affected offences by reference to general categories, rather than pursuing the course commended by the applicant of itemising all affected offences or defining them by reference to more narrowly expressed categories. While the category of offences affected by the regulation in issue, cl 16(d), is broadly expressed, it is, I consider, one reasonably capable of application. I do not consider the description used to be so vague or uncertain as to be incapable of interpretation. 37 There is, I consider, no compelling circumstance present here to justify further examination of this question. (iii) that I erred in Bourke's case and that the Tribunal did have a discretion open to it to exercise in relation to refusals of the present kind 38 The applicant calls on the Tribunal to depart from its reasoning in Bourke's case. The applicant argues that the Tribunal has misinterpreted the Court of Appeal's decision in Wilson's case by which it considered itself bound. The applicant submitted that the reasoning in Wilson was incorrect or not universally applicable. 39 An inferior court or tribunal is bound to adopt the interpretation of the Court of Appeal on a question of law, where the same question is in issue before that court or tribunal; it is not open to adopt the course of declaring the Court of Appeal to be incorrect. Any correction must come from that Court or the High Court. 40 The applicant submitted that Wilson's case should be confined in its application to the context of the licensing under the firearms legislation. I dealt in Bourke's case with that objection, made on that occasion by applicants who were not represented, in these terms: "Moving on to distinctions that were raised in submissions providing possible bases for not acting on Wilson's case. The first was that that case dealt with firearms licensing, whereas this case deals with security industry licensing. Whilst I appreciate that that may appear to some to be a material distinction in regard to the circumstances with which we are faced today, my conclusion is that it is not a material distinction. The key factor that is relevant to both Wilson's case and the present situation is that we are dealing with licensing schemes that have divided the way in which licensing will be conducted into categories, where certain applications must be refused mandatorily and others where applications will be considered on a discretionary basis." 41 The Court of Appeal gave a broad policy justification for not adopting the course, advocated by the applicant in this case, of inserting a layer of discretionary oversight by way of merits review in circumstances where the primary decision-maker was required to apply a mandatory requirement and no express jurisdiction to exercise an additional discretion had been conferred by statute on the review body. I summarised the Court's views as follow in Bourke's case: " The Court of Appeal referred in the decision to the inappropriateness in public policy terms of a situation where an administrator who is obliged to take certain action might have that action infringed or changed at a higher level on the basis that the appeals body (the Local Court in that example and this Tribunal in this example) could act in a different way in relation to the same matter. What the decision was saying, as I read it, is that there needs to be consistency in the justice system in the way in which it examines matters which are the subject of mandatory requirements." 42 The Commonwealth Administrative Review Council in a recent report, What Decisions should be subject to Merits Review? (July 1999), has also dealt briefly with this issue. It noted that decisions which automatically follow from the happening of a set of circumstances leave no practical role for merits review. It entered a limited qualification to this view as follows (see para 3.12): " Where, however, there is scope for disagreement about whether or not particular facts have occurred, the automatic or mandatory character of the decision flowing from those facts will not mean that the decision is inappropriate for review, although the review will necessarily be confined to ascertaining whether or not the relevant facts have occurred." This accords with the view expressed by the Court of Appeal and applied by this Tribunal in Bourke's case. 43 The applicant in its submissions described such a result as a "back-door ouster" of the Tribunal's jurisdiction in relation to merits review. The submission misunderstands the implications of the distinction - now perhaps more commonly found in administrative schemes - as between mandatory (or automatic) decisions and discretionary decisions. Conclusion 44 The result is that the applicant's various objections to the administrator's decision are rejected, and the application must be dismissed. Further Stay 45 The applicant foreshadowed that if the application was dismissed it would make an appeal to the Appeal Panel of the Tribunal. He applied in that event for an immediate continuation of the stay order made under s 60 of the Tribunal Act that has been in place until the making of this decision. 46 On the face of the Tribunal Act the power to make a further stay order does not lie with the Tribunal as presently constituted but rests with the Appeal Panel. 47 Section 116 of the Tribunal Act provides: " 116 Appeal does not stay decision Subject to any interlocutory order made by the Appeal Panel, an appeal under this Part does not affect the operation of the decision concerned or prevent the taking of action to implement the decision." 48 I will consider any further submissions on this matter following delivery of the decision. 49 The application is dismissed. 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.