Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Gambino v Commissioner for NSW Fair Trading [2014] NSWCATOD 135 Hearing dates: 9 September 2014 Decision date: 18 November 2014 Jurisdiction: Occupational Division Before: Dr J Lucy, Senior Member Decision: 1. The Commissioner's decision to cancel the applicant's real estate licence is affirmed. 2. The Commissioner's declaration that the applicant is a disqualified person for the purposes of the Property, Stock and Business Agents Act 2002 until 6 February 2023 is set aside. 3. The Commissioner's decision to disqualify the applicant from being involved in the direction, management or conduct of the business of a licensee until 6 February 2023 is set aside. Catchwords: ADMINISTRATIVE LAW - Civil and Administrative Tribunal - Occupational licensing - Real estate agent's licence - Disqualified person - Offences - Dishonesty offence - Time since committed - Whether trivial - Fit and proper person to hold a licence - Fit and proper person to be involved in the direction, management or conduct of the business of a licensee Legislation Cited: Property, Stock and Business Agents Act 2002 (NSW) Crimes Act 1900 (NSW) Administrative Decisions Review Act 1997 (NSW) Cases Cited: Law Society of NSW v Foreman (1994) 34 NSWLR 408 Barber v Law Society of NSW (No 2) [2001] NSWSC 361 Farah v Director General, Department of Finance and Services [2014] NSWCATAP 23 Wilson v Commissioner for NSW Fair Trading [2014] NSWCATOD 79 Commissioner for Fair Trading, NSW Office of Fair Trading v O'Connor [2007] NSWADTAP 37 Bek v Commissioner for Fair Trading [2004] NSWADT 149 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127 Kumar v Director General Department of Finance and Services [2013] NSWADT 124 Director General, Department of Finance & Services v Porter [2014] NSWCATAP 6 Ziems v Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279 Fitton v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 72 Delmege v Director General NSW Fair Trading [2013] NSWADT 269 Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 Prothonotary of the Supreme Court of New South Wales v Nikolaides [2010] NSWCA 73 Prothonotary of the Supreme Court of New South Wales v Da Rocha [2013] NSWCA 151 Bushell v Repatriation Commission (1992) 175 CLR 408 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 Brandusoiu v Commissioner of Police, NSW Police Force [2011] NSWADTAP 47 Minister for Immigration & Multicultural Affairs v Ali [2000] FCA 1385 Sudath v Health Care Complaints Commission [2012] NSWCA 171 Director General, Department of Finance and Services v Carr [2011] NSWADTAP 64 Plaintiff M150 of 2013 v Minister for Immigration and Border Protection (2014) 309 ALR 225; (2014) 88 ALJR 735; [2014] HCA 25 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Stojanovic v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 109 Category: Principal judgment Parties: Joseph Gerald Gambino (Applicant) Commissioner for NSW Fair Trading (Respondent) Representation: J Gambino (Applicant in person) Commissioner for NSW Fair Trading (Respondent) File Number(s): 1420221 reasons for decision Introduction 1The issues in these proceedings are whether the decisions of the Commissioner for Fair Trading ("Commissioner") to cancel the applicant's real estate licence, declare him to be a disqualified person for ten years and disqualify him from being involved in the direction, management or conduct of the business of a licensee for ten years, are the correct and preferable decisions. Procedural history 2On 7 February 2013, the applicant was convicted of the offence of dishonestly obtain financial advantage by deception within s 192E of the Crimes Act 1900 (NSW) and was sentenced to 150 hours community service. 3On 4 April 2013, the applicant was convicted of assault and fined $500. 4On 8 August 2013, the delegate of the Commissioner refused the applicant's application to have his real estate licence renewed on the basis that he was a disqualified person for the purposes of s 16(1)(a) of the Act and therefore not eligible to hold a licence under s 14(1)(d) of the Act. 5On 22 November 2013, a delegate of the Commissioner issued a Notice to Show Cause to the applicant pursuant to s 195 of the Act. The Commissioner's delegate stated in the notice that he was of the opinion that there was reasonable cause to believe there were grounds for taking disciplinary action against the applicant under s 191(d) and (e) of that Act. The ground under s 191(d) is that the person is a disqualified person or is otherwise not eligible under s 14 of that Act to hold a licence or certificate of registration and the ground under s 191(e) is that the person is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee. 6On 9 April 2014, the delegate found that the grounds in s 191(d) and (e) were made out and decided to: (1)cancel the applicant's licence in accordance with s 192(1)(g) of the Act; (2)declare the applicant to be a disqualified person until 6 February 2023 in accordance with s 192(1)(h) of the Act; (3)disqualify the applicant from being involved in the direction, management or conduct of the business of a licensee until 6 February 2023 in accordance with s 192(1)(i) of the Act. 7Following an internal review which affirmed the delegate's determination, the applicant applied to this Tribunal on 13 May 2014 for a review of the delegate's decision. Legislative Scheme 8Section 14(1) of the Act provides, relevantly: (1) A natural person is eligible to hold a licence only if the Director-General is satisfied that the person: ... (b) is a fit and proper person to hold a licence... and, ... (d) is not a disqualified person, ... 9The "Director-General" is the Commissioner for Fair Trading, Department of Finance and Services (the "Commissioner") (Act, s 3(1)). 10Section 16(1)(a) of the Act provides that person is a disqualified person for the purposes of the Act if the person "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." 11Section 16(2) of the Act provides: 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. 12Section 19 of the Act provides: An application must not be granted unless the applicant is eligible to be granted the licence or certificate of registration concerned (as provided by section 14). 13Section 191 of the Act relevantly provides: Disciplinary action under this Part can be taken against a person who is or was the holder of a licence or certificate of registration on any one or more of the following grounds: ... (d) the person is a disqualified person or is otherwise not eligible under section 14 to hold a licence or certificate of registration, (e) the person is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee, ... 14Section 192(1) of the Act relevantly provides: Each of the following actions is disciplinary action that the Director-General can take against a person under this Act: ... (g) cancel the person's licence or certificate of registration, (h) declare the person to be a disqualified person for the purposes of this Act, either permanently or for a specified period, (i) disqualify the person from being involved in the direction, management or conduct of the business of a licensee. 15Section 198(1) of the Act provides: If the Director-General is satisfied that there are grounds for taking disciplinary action under this Act against a person on whom a show cause notice has been served, the Director-General may by order in writing served on the person take such disciplinary action against the person as the Director-General thinks is warranted. Evidence 16The respondent provided evidence that the applicant had held a real estate agent's licence categorised as "licensee" from 1985 until August 2013, when it expired. He also held a real estate agent's licence categorised as "partner" from 2005 until its cancellation on 9 April 2014. 17The evidence of both parties indicated that, in December 2008, the applicant had made himself bankrupt. He had, however, obtained an exemption from the Commissioner under the Act from being a disqualified person under the Act (see s 16(1A)(a) and (2B)). This meant he could continue to hold a real estate licence. 18Before his bankruptcy, the applicant and his business partner were directors of three companies in which they each held shares. One of those companies had an interest in a real estate agency. The applicant was employed as the general manager of the agency and oversaw the property management and sales and leasing activities of the agency. 19Just prior to the applicant's bankruptcy, he relinquished his directorship of three companies and said that he gave his shares in those companies to his business partner to hold for him in trust. He continued to work in the business and to operate the accounts of the business. 20In November 2010, the applicant had a car accident in a vehicle he regarded as being his because he drove it, but which was in fact leased to one of the companies operated by his business partner. The car was written off and an insurance company agreed to pay the insured between $28,000 and $30,000 as a result. 21On or around the day the insurance moneys were due to be paid, in January 2011, the applicant's business partner removed all documents from the applicant's office and instructed the companies' bank that the applicant was not entitled to operate the companies' accounts any more. The applicant's employment was also terminated. 22The applicant regarded himself as being entitled to the insurance moneys and regarded his former business partner as unfairly depriving him of those moneys. Accordingly, in February 2011, he sent an email to a third party, from which one of the companies was receiving monies, instructing the third party to pay those monies into the applicant's personal account. The third party complied. The payments from the third party continued until May 2011. There was evidence, provided by the respondent, that the applicant obtained over $18,000 this way. 23The applicant was convicted of "drive vehicle recklessly/furiously or speed/manner dangerous" on 14 April 2011, fined and disqualified from driving for 12 months. 24The applicant gave evidence that, at the time he committed the offence of dishonestly obtain financial advantage by deception, he was under emotional and financial pressure, due at least in part to going through an acrimonious divorce. In a letter written to NSW Fair Trading on 30 April 2013, the applicant said of his decision to take the funds: "I know it is wrong, however in my state of mind at the time I felt justified in the fact that there would be no impact or repercussion for any of the residents [the company's clients] and that the only person affected by my actions would be [my former business partner]." 25On 7 February 2013, the applicant was convicted of the dishonesty offence and was sentenced to 150 hours community service. 26The respondent's evidence included a police fact sheet in relation to an assault offence, of which the applicant was convicted on 4 April 2013, and a criminal history report showing that he was fined $500 in relation to the offence. The fact sheet states that the applicant and his former partner had an altercation at her home which involved pushing and shoving by both parties, culminating in the applicant shoving his former partner down the stairs. On 30 April 2013, the applicant wrote a letter to NSW Fair Trading in which he stated he had pleaded guilty to the assault charge and that a "guilty plea for Charge 3 was entered as advised by my Legal Representative due to my inability to provide documentation to the Court". 27The applicant gave evidence that although the Police claimed that he pushed his former partner down the stairs, in fact she fell. He provided the Tribunal with emails to the Police, which he said was written by his former partner, saying that the police statement of facts "contained information that was incorrect and exaggerated," that she was not "shoved down the stairs" and that she did not think she had been pushed. The emails also indicated that his former partner wished to change an earlier statement she had made to Police. There was no evidence that she did so. 28The applicant said that the Police told him not to come to court (implying that they would not press charges) and that, in his absence, he was convicted of the assault offence. He indicated that the problems with Police stemmed back to 2011 where a warning was placed on his file stating that he was a "self-confessed ice user". He said this explained the Police's treatment of him but that he had no idea why that statement appeared on his file. 29Under cross examination, the applicant admitted that he had used methamphetamine in 2007 and had told the police he stopped using it in 2010 or 2011. The applicant said, however, that he had told police this after the warning was placed on his file, which is why he had said he had no idea why it was there. He also said he had attended a stimulant treatment program at a hospital. 30The applicant gave oral evidence that he had been a real estate agent for 35 years and had always conducted real estate transactions with care, diligence and honesty. He had been teaching real estate subjects at TAFE since his offence, but could not do that without a real estate licence because no one would employ him. He said he was not interested in running a real estate office any more, and that he wanted to continue teaching. 31The applicant provided references from a number of persons. Some of these persons said or implied that they were aware of the circumstances of his offence or at least of the circumstances in which his real estate licence was cancelled. The referees expressed opinions such as that the applicant was of good character, professional, an asset to the real estate industry, and of assistance to the students with whom he worked. One stated that he was a man of honour and integrity. Several indicated a view that the applicant would not repeat the conduct from which the offence arose. 32When cross examined about whether the referees who did not say they were aware of his offending were so aware, the applicant said that they were. 33The applicant also stated, in a letter to NSW Fair Trading, that he had volunteered his services to put together real estate teaching packages for a community college and had volunteered his time to the mentoring program at the Real Estate Institute of NSW. Respondent's Submissions 34The Commissioner submitted that the applicant is a disqualified person as the result of his conviction for an offence involving dishonesty within s 16(1)(a) of the Act, relying upon Farah v Director General, Department of Finance and Services [2014] NSWCATAP 23. The Commissioner also contended that the applicant is not a fit and proper person to hold a licence within s 14(1)(b) of the Act. 35The Commissioner submitted that the dishonesty offence should not be ignored on discretionary grounds. Mr Nicoletti, for the Commissioner, referred to the factors relevant to the exercise of the discretion to ignore the offence in s 16(2) of the Act, being the time that has passed since the offence was committed and the triviality of the acts or omissions giving rise to the offence. In the Commissioner's submission, insufficient time has passed since the offence was committed and the acts giving rise to the offence were not trivial. The Commissioner said that the applicant transferred funds belonging to others for personal use in circumstances where there was no authority to do so, the amount of money was significant and the acts giving rise to the offence were planned. 36The Commissioner submitted that, if the Tribunal was not prepared to exercise the discretion in s 16(2) in favour of the applicant, the effect of s 16(1)(a) is that the applicant is a disqualified person and ineligible to hold a licence. 37The Commissioner also submitted that the applicant is ineligible to hold a licence within s 14(1)(b) because he is not a fit and proper person. 38Mr Nicoletti said that the onus was on the applicant to demonstrate a reformation of his character since the time of the offence. He also submitted, relying upon Law Society of NSW v Foreman (1994) 34 NSWLR 408, that the considerations to be taken into account when determining whether a person is fit and proper included the protection of the public against similar conduct, the character of the person and the effect which an order will have on the understanding in the profession and amongst the public of the standard of conduct required. 39It was submitted for the Commissioner that the applicant had not accepted full responsibility for the offence of dishonestly obtain financial advantage by deception. Mr Nicoletti referred to the applicant's written submissions, in which the applicant attributed the "vexatious actions of his former business associate" as contributing to his offence, and Nr Nicoletti said this was indicative of a failure to accept responsibility for it. Further, Mr Nicoletti said, the applicant did not disclose his second offence to the Commissioner, thereby failing to accept responsibility for that. To give evidence that he had no idea why the "self-confessed ice user" warning was put on his police file, when he was fully aware that he had spoken to a police officer about using ice, reflected a misunderstanding about what honesty may mean when answering questions, in Mr Nicoletti's submission. 40It was also submitted for the Commissioner that the fact that the applicant was having difficulty obtaining employment without a real estate licence was not a factor the Tribunal was entitled to consider. 41In response to a question from the Tribunal about whether s 192 empowered the Commissioner to impose a disqualification period which differed from that in s 16(1)(a), Mr Nicoletti said that there was a discretion under s 192 to either extend or reduce the disqualification period in s 16, but that guidance should be taken from s 16. Applicant's Submissions 42The applicant submitted that it was relevant that there was no real estate trust account involved in the offence, nor were any real estate clients affected. It involved, in his description, a dispute between business partners and had no effect on the agency or any client associated with the agency. 43The applicant said that in 34 years of being involved in the real estate industry, he had always conducted his dealings with clients, colleagues and others with honesty, integrity and respect. He said he realized his offence of dishonesty was wrong. 44The applicant said that the police report in which he said he had used ice was made in February 2013, way after the warning was placed on his file. This explained his comment that he could not understand why it was on his file at the relevant time. 45He also said that it was very difficult for him to obtain employment being aged in his mid-fifties. He asked the Tribunal not to disqualify him at all, or alternatively to disqualify him for a shorter period, such as five years. Consideration 46The Tribunal is required to consider the following questions: (1)Is the Tribunal satisfied, under s 198 of the Act, that there are grounds for taking disciplinary action against the applicant, being that: (a)the applicant is a disqualified person within s 191(d) of the Act, on the basis that he a conviction in New South Wales or elsewhere for an offence involving dishonesty that was recorded in the last 10 years, and that offence should not be ignored? (b)the applicant is a person, within s 191(d) of the Act, who is otherwise not eligible under s 14 to hold a licence on the basis that the Tribunal is not satisfied that he is a fit and proper person to hold a licence within s 14(1)(b)? and/or (c)the applicant is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee, within s 191(e)? (d)If the Tribunal is satisfied that there are one or more grounds for taking disciplinary action against the applicant, what action should be taken? Is the applicant a disqualified person because of his conviction? 47A ground for disciplinary action is that the person is a disqualified person (s 191(d)). 48Under s 16(1)(a), a person is a disqualified person if he or she "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." 49I am satisfied that the offence of dishonestly obtain financial advantage by deception, of which the applicant was convicted, is an "offence involving dishonesty" within s 16(1)(a) of the Act. It is an offence that "answers that description without further inquiry" (Barber v Law Society of NSW (No 2) [2001] NSWSC 361 at [32], Farah v Director General, Department of Finance and Services [2014] NSWCATAP 23 at [19]-[20]). 50As the applicant's conviction was recorded in the last ten years, the applicant is a disqualified person by operation of s 16(1)(a) of the Act, unless the Tribunal, standing in the shoes of the Commissioner, determines that the offence should be ignored under s 16(2) (see Administrative Decisions Review Act 1997 (NSW), s 63(2)). Discretion to ignore the applicant's offence 51The only grounds on which the Tribunal may determine that the offence should be ignored are the time that has passed since the offence was committed and the triviality of the acts or omissions giving rise to the offence. 52The period of time sufficient to warrant an exercise of the discretion to ignore an offence must be viewed in the context of the offence for which an applicant has been convicted (Wilson v Commissioner for NSW Fair Trading [2014] NSWCATOD 79 at [25]; Bek v Commissioner for Fair Trading [2004] NSWADT 149 at [47]). 53In Commissioner for Fair Trading, NSW Office of Fair Trading v O'Connor [2007] NSWADTAP 37 at [34], the Appeal Panel of the former Administrative Decisions Tribunal noted 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". 54I find that the acts and omissions giving rise to the offence were not trivial, having regard to the conduct of the applicant at the time the offence was committed. The offence was, as the applicant has admitted, pre-meditated. The payments into the applicant's bank account continued for some months as a result of the applicant's acts of arranging for this to occur, and as a result of him omitting to stop those payments. Despite the applicant's evidence that he was under financial and emotional pressure at the time, and that he was suffering as a result of what he regarded as his business partner's unfair treatment of him, he clearly decided to take the law into his own hands to recover amounts to which he perceived he was entitled. Further, he persisted in the attitude that he was justified in doing this, at least between February and May 2011. 55The time that has passed since the offence was committed is approximately three and a half years. I am not satisfied that this is a sufficient period of time to warrant an exercise of the discretion in the applicant's favour. 56For these reasons, I decline to exercise the discretion under s 16(2) of the Act to determine that the dishonesty offence committed by the applicant should be ignored for the purposes of s 16. Fitness and propriety to hold a real estate licence 57Disciplinary action may be taken against a person who is a disqualified person or is otherwise not eligible under section 14 to hold a licence or certificate of registration (Act, s 191(d), my emphasis). I have therefore considered whether the applicant is a fit and proper person to hold a real estate licence within s 14(1)(b) of the Act as this is a criterion of eligibility to hold such a licence. 58The expression "fit and proper person" "takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities": Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, Toohey and Gaudron JJ at 380; Farah v Director General, Department of Finance and Services [2014] NSWCATAP 23 at [11]. The question as to the applicant's fitness and propriety at the time of the offending conduct must therefore focus on his fitness and propriety to hold a real estate agent's licence. Fitness involves "three things, honesty, knowledge and ability": Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127, Dixon CJ, McTiernan and Webb JJ at 156; Kumar v Director General Department of Finance and Services [2013] NSWADT 124 at [62]; Farah v Director General, Department of Finance and Services [2014] NSWCATAP 23 at [10]; Director General, Department of Finance & Services v Porter [2014] NSWCATAP 6 at [30]. 59The fact of the applicant's conviction is not conclusive of whether he is a fit and proper person: Ziems v Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279 at 302; Fitton v Commissioner for Fair Trading, NSW Office of Fair Trading [2007] NSWADT 72 at [38]. However, the conduct constituting the offence is relevant. 60At the time the applicant committed the offence of dishonestly obtain financial advantage by deception, I find that he was not a fit and proper person to hold a real estate agent's licence. Whilst I accept the applicant's submission that the conduct leading to his conviction did not directly affect any clients, nevertheless, in my view, it demonstrated that he lacked the "honesty to execute [the office of a real estate agent] truly, without malice affection or partiality" (Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127, Dixon CJ, McTiernan and Webb JJ at 156). As Montgomery JM observed in Delmege v Director General NSW Fair Trading [2013] NSWADT 269 at [144], honesty and financial propriety are essential requirements for holding a real estate licence. The Tribunal is not satisfied that the applicant was "possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public ... as a person to be entrusted with the sort of work which the licence entails": Sobey v Commercial and Private Agents Board (1979) 22 SASR 70; Kumar v Director General Department of Finance and Services [2013] NSWADT 124 at [53]. 61The critical question is whether the applicant is now a fit and proper person to hold a real estate licence, having changed in relevant ways since the time of the offence. A person's ability to demonstrate recognition of misconduct is relevant (Delmege v Director General NSW Fair Trading [2013] NSWADT 269 at [22]). 62The respondent submitted that the applicant has an onus to demonstrate reformation of his character. However, the cases relied upon by the respondent (Prothonotary of the Supreme Court of New South Wales v Nikolaides [2010] NSWCA 73; Prothonotary of the Supreme Court of New South Wales v Da Rocha [2013] NSWCA 151) did not involve merits review. In merits review, it is not useful to speak of onus of proof (Bushell v Repatriation Commission (1992) 175 CLR 408, Brennan J at 424-425; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152, Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ at 164 [40]). Rather, the Tribunal must decide what the correct and preferable decision is having regard to the material before it (Administrative Decisions Review Act 1997, s 63(1)). Of course, as a practical matter, evidence of an applicant's reformation of character would normally be adduced by the applicant. 63The applicant has said that what he did was wrong and that he recognises he should have handled the situation with his former business partner in a different way. Nevertheless, as the respondent submitted, the language he used in his submissions to describe the circumstances of the offence ("the vexatious actions of my former business associate transformed a dispute between business partners into a crime") and his description of his business associate as "devious and calculating" and himself as "trusting" albeit with "poor judgement in taking matters into my own hands" suggest that he has not fully accepted responsibility for his offending. 64It is also relevant that the applicant was not frank with the Tribunal about the circumstances in which a warning was placed on his police file about his drug use, only conceding in cross examination that he had used the drug in question at the relevant time. This conduct is indicative of a form of dishonesty, in that he deliberately created a false impression that he had not used the relevant drug, whilst under oath. It was not candid for him to say he had "no idea" why the police put a warning on his file concerning his drug use, in circumstances where he had used methamphetamine for an extended period prior to the warning being placed on his file. 65In addition, the assault offence of which the applicant was convicted is relevant. In assessing fitness and propriety, the circumstances behind the conviction must be taken into account. As the ADT Appeal Panel said in Brandusoiu v Commissioner of Police, NSW Police Force [2011] NSWADTAP 47 at [19], "a disciplinary or similar body must hear the case put by a licensee challenging the prior external finding that has led that body to take disciplinary action against the licensee" whilst also giving "'due regard' to the material" concerning the external finding. The Appeal Panel also expressed the view that the Tribunal is not entitled to reach a view that a person was wrongly convicted (at [26], citing Minister for Immigration & Multicultural Affairs v Ali [2000] FCA 1385 at [44]), but this may need qualification in light of the Court of Appeal's later comments in Sudath v Health Care Complaints Commission [2012] NSWCA 171. 66In Sudath v Health Care Complaints Commission [2012] NSWCA 171, Meagher JA, with whom Whealy JA agreed, said at [83]: It is not uncommon for the jurisdiction of an administrative tribunal to exercise disciplinary or other powers to be founded upon its being satisfied after inquiry as to the fact of a conviction or as to a person not being of good character or being unfit to practise. In the latter cases, if there is a contest as to the occurrence or significance of the conduct relied upon as relevant to the assessment of character or fitness to practise, material which tends to show whether that conduct occurred or places it in context is relevant to the subject-matter of the inquiry. This remains so even if the conduct has been the subject of an earlier conviction or adverse finding and the evidence sought to be led contradicts the finding or facts essential for the conviction. The mere fact of inconsistency does not of itself excuse the Tribunal from inquiring into the relevant facts or give rise to an abuse of its process. None of this means that a tribunal cannot or should not give significant weight to earlier convictions or findings of a court when addressing whether conduct has occurred. Nor is it the position that a tribunal is required to receive evidence about such conduct if the purpose for which it is proffered is not to challenge the fact of the conduct but to impugn an earlier conviction or the fairness of an earlier trial. 67The applicant pleaded guilty to the charge of assault on legal advice and did not appeal his assault conviction. The conviction is strong prima facie proof of the alleged assault. The email which the applicant said was from his former partner, sent prior to the conviction, indicated that she wanted to change her statement to retract her allegation of assault. However, the applicant did not make his former partner available to give evidence, or provide a statement from her in these proceedings. In the circumstances, even if I were entitled to reach a view that the applicant was wrongly convicted, I am not satisfied on the evidence that this is the case. 68The applicant has produced references from people attesting to his good character. I take those into account. I also take into account his volunteer work. However, these factors are not sufficient to satisfy me of his fitness and propriety to hold a real estate licence in the circumstances. 69I am not satisfied that the applicant has demonstrated sufficient remorse, or understanding of the impropriety of his conduct, in relation to both the dishonesty and assault offences, as to have become a fit and proper person to hold a licence. 70For the above reasons, I am not satisfied that the applicant is a fit and proper person to hold a real estate licence within s 14(1)(b) of the Act. It follows that the applicant is not eligible to hold such a licence. Fitness and propriety to direct, manage or conduct business 71The other ground for disciplinary action relied upon by the Commissioner is s 191(e), that the applicant is not a fit and proper person to be involved in the direction, management or conduct of the business of a licensee. 72The expression "direction, management or conduct of the business of a licensee" is used in s 191(e) (as a ground for disciplinary action), in s 192(1)(i) (concerning the disciplinary action which may be taken) and in s 202 (a criminal offence provision). In Director General, Department of Finance and Services v Carr [2011] NSWADTAP 64 at [38], the Appeal Panel of the former Administrative Decisions Tribunal said that "the word 'conduct' [in the expression] is used in the three provisions [ss 191(e), 192(1)(i) and 202] to mean more than having a non-directive administrative role in the affairs of the business. It takes its colour from the words 'direction' and 'management'." That is, "the phrase is to be seen as a composite one, using three different terms to describe roles in relation to the carrying out of the business that belong to a senior or ultimate decision making level" (at [39]). 73For the reasons given above concerning the applicant's fitness and propriety to hold a real estate licence, I find that the applicant is not fit and proper to be involved in the direction, management or conduct of the business of a licensee. Did the Commissioner make the correct and preferable decisions? 74The next question the Tribunal needs to consider is whether the disciplinary decisions of the Commissioner's delegate were the correct and preferable decisions (Administrative Decisions Review Act 1997, s 63(1)). 75Disciplinary action under the Act may only be taken against a person on one or more of the grounds set out in s 191 of that Act (s 198(1)). For the reasons given above, I am satisfied that the grounds in s 191(d) and (e) are established. Licence Cancellation 76As I have found that the applicant is a disqualified person, and a person who is not eligible to hold a licence, I also find that the Commissioner's decision to cancel his licence pursuant to ss 198(1) and 192(1)(g) is the correct and preferable decision. Power to Declare that Applicant is Disqualified Person 77The question whether the Commissioner's decision to declare the applicant to be a disqualified person is the correct and preferable decision raises the proper construction of s 192(1)(h) of the Act and the relationship between that provision and s 16(1)(a) of the Act. As already mentioned, s 16(1)(a) provides that a person is a disqualified person for the purposes of the Act if the person has a conviction for an offence involving dishonesty that was recorded in the last 10 years, unless the Director-General has determined that the offence should be ignored, and s 192(1)(h) provides that the Commissioner may declare a person to be a disqualified person for the purposes of the Act, either permanently or for a specified period. 78There is at least an apparent or potential tension between the operation of s 16(1), by which a person is rendered a disqualified person if certain conditions are met, and s 192(1)(h), which gives the Commissioner a power to declare a person to be a disqualified person. Particular tensions arise in relation to provisions in s 16(1) such as s 16(1)(a) and (b), which appear to contemplate that disqualification will last for a specified time, and the provision in s 192(1)(h) which appears to contemplate that the length of the disqualification is at the Commissioner's discretion and may be "permanently or for a specified period". 79The provisions must be construed in the context of the Act as a whole, and on the basis that they are intended to give effect to harmonious goals (Plaintiff M150 of 2013 v Minister for Immigration and Border Protection (2014) 309 ALR 225; (2014) 88 ALJR 735; [2014] HCA 25, Hayne and Kiefel JJ at [49] and [68]; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, McHugh, Gummow, Kirby and Hayne JJ at 381-382). 80Questions arise as to the extent of the discretion conferred by ss 192(1)(h) and 198 (read together), in circumstances where a person is already a disqualified person by reason of s 16, and whether the power to declare a person to be a disqualified person is available to be used at all in those circumstances. On one view, the purpose s 192(1)(h) is to provide an a means by which the Commissioner may declare a person to be a disqualified person, on disciplinary grounds, if the person is not already such. Section 16(1) provides for various circumstances in which a person is a disqualified person. The declaration that a person is a disqualified person under s 192(1)(h) does not, of itself, have that effect. It is given that effect by s 16(1)(j) which provides that a "person is a disqualified person for the purposes of this Act if the person: ... is for the time being declared to be a disqualified person under Part 12 (Complaints and disciplinary action)". There is some circularity in a person being declared to be disqualified on the ground that the person is a disqualified person under s 16(1), then this forming a basis on which s 16 effects a (further or additional) disqualification. 81There are some indications in the Act that s 16(1) is intended to be determinative of the circumstances of a person's status as a disqualified person where it applies, and that it constrains the Commissioner's power to declare a person to be a disqualified person for a greater or lesser period of time. The period of disqualification in s 16(1) is inherent in the provision - a length of time in the case of s 16(1)(a) and (b), or the period of time the particular circumstance subsists, in relation to the other paragraphs - whereas the period of disqualification under s 192(1)(h) is in the Commissioner's discretion. If the Commissioner were to impose a shorter period of disqualification in circumstances where s 16(1)(a) applied, for example, the person would be a "disqualified person" by operation of both s 16(1)(a) and 16(1)(j) until the period imposed by the Commissioner came to an end, then would continue to be a disqualified person until the statutory period of disqualification elapsed. It is not possible, then, for the Commissioner to shorten a statutory period of disqualification under s 16(1)(a) (other than in accordance with s 16(2)) and it is, in my view, doubtful whether it is open to the Commissioner to lengthen it by making a declaration, unless relying upon a disciplinary ground other than that the person is a disqualified person. 82The same considerations apply to other provisions of s 16(1). The legislature contemplates in s 16(1)(f) that a person who is a mentally incapacitated person is a disqualified person. The effect of this is that the person is only disqualified for as long as the person remains mentally incapacitated. However, if s 192(f) operated so as to allow the Commissioner to declare the person to be a disqualified person because he or she was a mentally incapacitated person and therefore a disqualified person (see s 191(d)), this would mean that the Commissioner could render the person a disqualified person permanently. Again, this appears to be inconsistent with the legislative purpose as expressed in s 16. Similarly, the circumstances that a person has failed to pay a contribution or levy payable by the person under Part 10 and the failure continues, makes the person a disqualified person (s 16(1)(l)), but it would be a strange result if this justified the Commissioner in declaring the person to be a disqualified person for a period extending beyond the time when the contribution or levy was paid. 83Another consideration suggesting that there are limitations upon the Commissioner's power to declare a person who is a disqualified person by operation of s 16 to be such is that a declaration under s 192(1)(h) is unnecessary before the provisions in the Act concerning disqualified persons (such as ss 43, 44, 45 and 191(d)) apply to the person in that capacity. This suggests that the making of a declaration when a person is already a disqualified person by reason of s 16 has no real utility, unless the purpose of it is to lengthen the period of disqualification. 84On the other hand, there are no words of limitation indicating that the Commissioner may not make a declaration that a person is a disqualified person if he or she is such a person by operation of s 16. Further, the combined effect of ss 192(2), 198(1) and 191(d) is that such a declaration may be made (on a literal reading of the legislation) if the person is already a disqualified person. These factors, whilst relevant, are not conclusive of the interpretation of the provisions. 85The Appeal Panel of the former Administrative Decisions Tribunal considered the construction of s 192(1)(h) in Director General, Department of Finance and Services v Carr [2011] NSWADTAP 64. The Panel had to determine whether it was permissible for the Tribunal to make a declaration under s 192(1)(h) that the respondent was a "disqualified person" for the purposes of the Act, which was limited in its reasons for decision to the respondent's licence only and whether s 192(1)(h) was limited to matters flowing from s 191(d) only. 86The Panel accepted the administrator's submission that the imposition of a general order of disqualification under s 192(1)(h) is not limited to one or other of the statutory grounds for disqualification and that it cannot be restricted to disqualification from holding a licence (unless there is an express provision to that effect) (at [24]-[25]). It was apparently assumed by the parties, and by the Tribunal, that a declaration under s 192(1)(h) could be made in respect of a statutory ground of disqualification. 87The Appeal Panel observed that disqualification was "the most draconian sanction in the scheme of the Act" which was intended "to apply to the most egregious cases" (at [29]) and it would be inconsistent with the statutory scheme for the power to be interpreted as authorising an order disqualifying a person from holding a licence only. 88The Appeal Panel then considered the relationship between s 192(1)(h) and 192(1)(i). It commented (at [34]): Once an order is made under s 192(1)(h) it is difficult to see what if any work is left to be done by an order under s 192(1)(i). If a person is excluded from the industry for all purposes, then, in principle, they cannot be involved in the direction, management or conduct of a business. The administrator explained at hearing that this additional power was useful for cases where a disqualified person sought through extra-legal arrangements to continue to direct, manage or conduct a business. It is backed by an offence provision (see further below). It is also theoretically conceivable that a disciplinary case might arise where there is no disqualification order under s 192(1)(h) but only a 'direction, management and conduct' order under s 192(1)(i). 89The Appeal Panel also noted at [40]-[41]: We note that ground (d) [that is, s 191(d)] refers as a ground for disqualification the fact that a person is a 'disqualified person'. At this point, in our opinion, the term is being used to refer back to the disabling factors that render a person disqualified set out in s 16. It does not confine the scope of the disciplinary declaration that can be made under s 192(1)(h). The disciplinary declaration could have as its only basis the possession of a disabling factor. But equally it could be made by reference to a pattern of repeated violations or in response to a grave violation of standards. The administrator's case included reference to the voluntary bankruptcy but it did not stop there. The Tribunal found the administrator's wider case made out in most respects. In our view the power to make orders of disqualification under s 192(1)(h) is not confined by reference to ground (d) ... The Appeal Panel was not asked to consider the proposition that a disciplinary declaration under s 192(1)(h) may not be made if the only ground for doing so is that the person is already disqualified under s 16. 90I incline to the view that the legislature did not intend s 192(1)(h) to be used to make a declaration that a person is a disqualified person on the sole ground that the person is already a disqualified person by operation of s 16, or at least that any such declaration must be consistent with the time frames (implicit or explicit) in s 16. A decision under s 192 to declare a person to whom s 16(1)(a) applies to be a disqualified person for a shorter time frame would not have that effect, for reasons given above, and a decision to increase the time frame for the disqualification would appear to be inconsistent with the legislature's intention in s 16 that the disqualification period be ten years. 91However, it is not ultimately necessary to determine this issue. Whether correct and preferable decision is to declare applicant to be a disqualified person 92In my view, it is not the preferable decision to declare the applicant to be a disqualified person. The effect of the Tribunal making a declaration that the applicant is a disqualified person for ten years from the date of the commission of the offence would be that, if the Commissioner determined that the offence should be ignored for the purposes of s 16 at any time before the end of the ten year period, the applicant would nevertheless remain a disqualified person by operation of s 16(1)(j). It is better, in my view, to allow s 16(1)(a) to take effect without making any declaration pursuant to s 192(1)(h) and thereby to leave open the possibility that the Commissioner may decide that the applicant's offence should be ignored at a later point in time. The statutory period of disqualification adequately informs the public and the profession of the standard of conduct required and provides a deterrent to engaging in conduct below that standard. 93The circumstance that the applicant is not eligible to hold a licence because he is not a fit and proper person to do so may be considered in conjunction with his status as a disqualified person when taking into account the disciplinary ground in s 191(d) and the appropriate sanction. However, the question of the applicant's fitness and propriety is something which is best evaluated from time to time; in this case, the Tribunal cannot with confidence determine whether the applicant will be a fit and proper person to hold a licence (Act, ss 14(1)(b), 191(d)) or to be involved in the direction, management or conduct of the business of a licensee (Act, s 191(e)) some years in the future. This will depend upon his conduct in the intervening period. It is not my view that a period of disqualification greater than ten years should be imposed at this stage. In these circumstances, the statutory disqualification is a sufficient sanction and it is not necessary to take the disciplinary action of making a declaration under s 192(1)(h) on the basis that the applicant is not a fit and proper person. 94If, before the end of the ten year disqualification period, the Commissioner determines that the applicant's offence should be ignored, his fitness and propriety will still be relevant. He will not be eligible to hold a licence until the Commissioner is satisfied that he is a fit and proper person to do so. Accordingly, the correct and preferable decision is to rely upon the statutory period of disqualification and not to make a declaration that the applicant is a disqualified person. Disqualification from involvement in direction, management or conduct of licensee's business 95The Commissioner also made an order disqualifying the applicant from being involved in the direction, management or conduct of the business of a licensee for a period of ten years from his conviction. 96There must be some doubt as to whether the Commissioner has power to make an order under s 192(1)(i) which takes effect for a specified period of time. In Director General, Department of Finance and Services v Carr [2011] NSWADTAP 64 at [32], the ADT Appeal Panel said parenthetically: (Nor, we, note is there a power to impose a time bar given in s 192(1)(i), though it appears (as here) to be customary for the administrator to set one, an issue the subject of comment in Stojanovic v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 109 (15 April 2008) at para [18] by Handley DP.) 97In the case of Stojanovic v Commissioner for Fair Trading, New South Wales Office of Fair Trading [2008] NSWADT 109, Handley DP said at [17]-[18]: 17 In my view, a reading of paragraphs (a) to (i) of section 192(1) indicates that, at least in general terms, these are discrete forms of disciplinary action open to the Commissioner, and section 192(2) provides for one or more of these disciplinary actions to be taken against a person. Section 192(1)(h) provides for a declaration that a person is a disqualified person for the purposes of the Act to apply either permanently or for a specified period. There is no reference to a period for the disqualification under section 192(1)(i). 18 However, whilst discrete forms of disciplinary action, the wording of the paragraphs (h) and (i) suggests that a declaration that a person is a disqualified person - for the purposes of the Act - is made under section 192(1)(h). But then, in such a case, pursuant to section 192(1)(i), a person can also be disqualified from being involved in the direction, management or conduct of the business of a licensee, the implication being that this extended disqualification is effective for the duration of the declaration under section 192(1)(h). Whether or not a disqualification can be made under section 192(1)(i) in the absence of a declaration under section 192(1)(h) is unclear. It could be argued that it is implicit in the wording of section 192(1)(i) that in order to give effect to the power, the provision should be interpreted as meaning that the disqualification can be made either permanently or for a specified period. In my view, the matter should be clarified through appropriate legislative amendment. 98The specific reference to the disciplinary action in s 192(1)(h) encompassing disqualification "either permanently or for a specified period," and the lack of any such reference in s 192(1)(i), means that it is likely, in my view, that the legislation intended the disciplinary action in that provision to involve permanent disqualification. This is consistent with the Appeal Panel's observation that s 192(1) creates "a hierarchy of disciplinary actions" from the least to the most serious. Further, whereas s 192(1)(h) refers to the making of a declaration, s 192(1)(i) uses the language "disqualify the person", a distinction which supports the proposition that the disqualification is absolute. The disqualification appears to take effect as an immediate consequence of the Commissioner's determination under s 192(1)(i), rather than by operation of s 16(1)(j) (which uses the language "declared to be a disqualified person" thus picking up s 192(1)(h) but arguably not s 192(1)(i)). Thus, it is doubtful that the Commissioner had power to disqualify the applicant from being involved in the direction, management or conduct of the business of a licensee for a period of ten years from his conviction. As I have decided, however, that it is not desirable to make such an order, it is not necessary for me to decide this point. 99The effect of the statutory disqualification under s 16(1)(a) is that the applicant will be unable to hold a real estate agent's licence or a certificate to operate as a salesperson until 2023. This adequately protects the public. There is no need, in the circumstances, for an order to be made under s 192(1)(i). The making of an order of permanent disqualification under that provision (or, if I am able to do so, an order disqualifying the applicant for a specified period of more than 10 years from his conviction) would, in my view, be a disproportionate response to the applicant's conduct and it is not something sought by the Commissioner. 100The correct and preferable decisions are therefore that the applicant's real estate licence be cancelled and that no other disciplinary action be taken against the applicant. The Commissioner's decisions to take the disciplinary action described in s 192(1)(h) and (i) are set aside. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 18 November 2014