Algie v Commissioner for Fair Trading and Commissioner of Police, NSW Police Force

Algie v Commissioner for Fair Trading and Commissioner of Police, NSW Police Force - [2017] NSWCATAD 243 - NSWCATAD 2017 case summary — Zoe

[3]

Material before the Tribunal

The Respondents relied on 1. documents filed on 22 March 2017 pursuant to s 58 of the ADR Act (the s 58 documents); 2. a Redacted Adverse Security Determination filed 10 April 2017. 3. a 60 page bundle of tabbed and paginated documents named "Further documents filed by the Respondents" filed 23 May 2017; 4. documents produced under summons on 7 June 2017 by a firm of chartered accountants; 5. a bundle of bank statements in the name of Quentin James McGilvray produced 21 June 2017; 6. a Fair Trading Fact Sheet named "Applying for an Operator Licence" under the Act; 7. a 39 page document called "Parenting Payment" prepared by the Department of Human Services (Cth); 8. a statement of Jacqueline Palmer made 25 May 2017 filed 26 May 2017; 9. a statement of Senior Constable Cameron Bounds made 17 May 2017 filed 23 May 2017; 10. an affidavit of Lucy Elizabeth Boyle made 20 June 2017 filed 21 June 2017 together with 103 pages of annexures; 11. written submissions for the Respondents dated and filed 23 May 2017 (RS); and 12. oral submissions made by Mr Kalyk during the proceedings.
[NOT FOR PUBLICATION]
Ms Algie relied on: 1. the Application; 2. some of the s 58 documents; 3. her amended statement made 4 May 2017 filed 5 May 2017; 4. a bundle of documents filed 20 June 2017 by Ms Algie's then solicitors; 5. undated submissions in reply filed 15 June (ASR); and 6. her oral evidence and oral submissions during the proceedings.
Unless stated to the contrary references in these Reasons to: 1. legislative provisions are to provisions of the Act; 2. paragraphs of submissions by the Respondents are to paragraphs of RS; 3. paragraphs of submissions by Ms Algie are to paragraphs of ASR.
Footnotes have not been included in any documents extracted in these reasons.
During the proceedings references were made to certain persons (who were not called to give evidence) which may be regarded as defamatory. Some names of persons, places and business names have been anonymised to protect the privacy of those persons.
[NOT FOR PUBLICATION]
References to "tattooing" and cognate words in these reasons are to "body art tattooing" and cognate phrases as defined in the Act.

[5]

Background to the legislative scheme

The Act was created "to provide for the licensing and regulation of body art tattooing businesses and body art tattooists" (Long title of the Act).
The Act does not specify its objects. However, in the second reading speech in the Legislative Assembly, on 22 May 2012, the Minister for Fair Trading said: …. This bill is part of the Government's continued response to gang crime in New South Wales …. [it] aims to break the stranglehold that outlaw motorcycle gangs have over the tattoo industry in New South Wales …. Removing bikies from the tattoo industry will reduce the reasons for rival gangs to fight turf wars … When tattoo parlours are no longer controlled by bikies they will not be so closely associated with serious acts of violence …. Bikies will no longer feel that …. they have the right to stand over, and extort, owners of tattoo businesses who are unaffiliated with outlaw motorcycle gangs. Nor will tattoo parlours be able to provide a means for organised criminals to launder the proceeds of crime ….. The bill introduces a licensing and regulatory regime for tattoo parlours and tattooists. The bill provides for the Commissioner of Police to conduct investigations into licence applicants and licensees to ensure that only fit and proper persons are granted and able to hold such licences .... The bill creates two classes of licence …. Applications for licences will be made to the Commissioner for Fair Trading. An operator licence will authorise the licensee to carry on a body art tattooing business at a specific premises. A tattooist licence will authorise the licensee to perform body art tattooing procedures …. …. The bill provides a definition of "close associate". Defining close associates is important to ensure that all persons with a relevant interest in a body art tattooing business are identified. A close associate is someone who will hold a financial interest, or can exercise any power in the applicant's business, and who by virtue of that power will be able to exercise a significant influence over the business. "Close associate" also will include a person who has any relevant position in the business that will be carried on under the authority of the licence. In some cases bikie gangs, who have effective control over a tattoo parlour, have, on paper, no legally enforceable interest in the business. The bill makes it clear that a close associate is someone who can, in fact, direct the business, or receive a financial benefit from it whether or not it is legally enforceable. …. The bill permits the Commissioner for Fair Trading to undertake investigations and inquiries with respect to a licence application and requires him to refer the application to the Commissioner of Police. The Commissioner of Police will determine whether the applicant is a fit and proper person and whether granting the applicant a licence would be in the public interest. Either the Commissioner for Fair Trading or the Commissioner of Police may require a licence applicant or close associate to provide or produce further information or records. Where an applicant fails to provide or produce such information, the Commissioner for Fair Trading may refuse to determine the application. The Commissioner for Fair Trading may grant, or refuse to grant, a licence, after having considered the report of the Commissioner of Police on whether the applicant is a fit and proper person. The Commissioner for Fair Trading is not permitted to grant a licence if the Commissioner of Police has reported that the applicant is not a fit and proper person or that granting the licence would be contrary to the public interest. The Commissioner for Fair Trading must also not grant licences where an application has not been duly made …. …. the Commissioner of Police may consider criminal intelligence or other criminal information …. in relation to an applicant or licensee or in relation to a close associate …. of an applicant or licensee. [this] can include information relevant to the business or procedures to be carried out under the licence, or that gives an indication that some improper conduct could occur if the applicant were granted a licence …. … The bill also provides protections for criminal intelligence considered by the Commissioner of Police or the Commissioner for Fair Trading. The Commissioner of Police is not required to give any reasons for making a determination and recommendation that an applicant or licensee is not a fit and proper person, or that granting a licence is contrary to the public interest if giving those reasons would disclose criminal intelligence or other criminal information. For the same reasons, the Commissioner for Fair Trading is not required to give any reasons for having acted on such a recommendation by the Commissioner of Police and as a result refused to grant a licence, …. One of the Government's aims in introducing this legislation is to ensure that tattoo parlours cannot be used to launder the proceeds of crime. …. The bill provides for the protection of criminal information and intelligence in appeals of licensing decisions made on fit and proper person or public interest grounds. In such appeals, the …. Tribunal is to ensure that it does not disclose the existence or content of any criminal intelligence report or other criminal information without the approval of the Commissioner of Police.
The Minister for Police, in the second reading speech in the Legislative Council on 23 May 2012, used almost identical wording to that used above by the Minister for Fair Trading.

[9]

Shop 1 at Location 1

There is no dispute concerning Ms Algie's evidence that between 2003 and 2004 she began working as a body tattooist at Shop 1 in Location 1, New South Wales. She worked at that studio on a full-time basis for approximately 3-4 consecutive years. The manager was Person 1. Her written evidence included: 8 When I commenced my position with [Shop 1] …. I had no knowledge about any relationship or affiliation between [Shop 1] and any outlaw motorcycle group. When I first began my position, I dealt with Person 1 in relation to all employment related matters. He was considered the head/manager tattooist of the business and was responsible for overseeing my work. I worked under his instruction and guidance for the first few months. After this, I operated more independently and maintained my own clientele. 9. A short period after I commenced my position, I observed Person 1 arriving to work on a Harley Davidson motorcycle. I deduced, from general conversations with Person 1 and observations whilst working as a tattooist, that Person 1 may be affiliated or otherwise involved with a motorcycle gang. At no point did I discuss or otherwise converse with Person 1 about the extent of his involvement with any motorcycle gang and I made it clear to him and all other employees of [Shop 1] that I was only engaged with the business on a professional level.
Ms Algie said there was an apprentice and receptionist at Shop 1 as well as her and Person 1. She saw Person 1 each day. Shortly after starting, she saw him arrive on a Harley Davidson. She knew he was with the Rebels because she saw the Rebels patch on his jacket. She did not ask questions about his affiliation with the Rebels. She doesn't ask personal questions.
Somewhat inconsistently, Ms Algie also said: 1. she did not know for sure that Person 1 was affiliated with an OMCG, 2. she denied that she was working for someone who might be involved with the Rebels, and 3. she said she was a professional. She was not working for a Rebel, she was working as an employee in the business.
Ms Algie's evidence was that apart from Person 1's clothing she never saw any other person wearing motor cycle gang colours on the premises. Nothing else at Shop 1 was associated with the Rebels.
Ms Algie's cross-examination included: Question - you told the Tribunal that you informed all of your managers and supervisors that you would not tattoo anyone with gang colours. Now it is so you did not have a conversation with Person 1? In paragraph 20 you also said "I did not wish for my clientele or members of the public to perceive me as being in any way connected with any person who I suspected may be affiliated with outlaw motorcycle gangs. That is a very strong statement. Are they your words? Is that truthful evidence? Answer - Yes Question - Does that mean that while you were working at Shop 1 you would not want any members of the public to perceive that you were connected with Person 1. Answer - Yes
Ms Algie said while at Shop 1 she generally worked next to Person 1 and he trained her. This is not consistent with her answer to the last question in the preceding paragraph.
[NOT FOR PUBLICATION]

[12]

Move to Shop 3

Ms Algie's written evidence included: 10. Prior to commencing my position out of Shop 3, when I was working as a tattooist out of Shop 2 in Location 2, I was contacted by Person 3 in relation to working as a tattooist out of his new business. At this time, Person 3 advised me that I had been recommended to him by Person 1, the manager of [Shop 1], where I had previously worked as a tattooist. Person 3 said words to me to the effect of, "You have been recommended to me as an extremely skilled tattooist. I intend to open a tattooist parlour in Location 3, so would you like to work out of the business?" Initially I declined the offer, as I had steady employment and did not wish to relocate to Location 3. Person 3's partner, Person 6, contacted me on several occasions after my conversation with Person 3 to encourage me to relocate and work with their tattooist business. My understanding was that Person 6 was to be responsible for the day-to-day management of the business and that Person 3 would have minimal involvement with the business. I was familiar with Person 6, as she and I had both attended Wingham High School. 11 In or around August 2011 I relocated with my partner, Quentin from Location 2 to Location 3. At this time, I ceased my employment with Shop 2. When I had initially left Location 3, I had no intentions of returning to the area. My reasons for relocating to Location 3 were not related to Person 3's offer of employment. Rather, my mother had recently suffered from serious cardiac related problems and was extremely unwell. My sister had also just given birth to another child. My mother had a lot of responsibility in caring for my sister's children and so I wished to be closer to my family to better support them. 12. After relocating to Location 3, I was unemployed for approximately 1 month. During this period, I assisted some of my friends to support myself and my partner. I had a friend who owned and managed a takeaway store where I helped out with some cash in hand work. During this period, I was also receiving Centrelink benefits. Due to the small size of Location 3 and its surrounding regions, I knew that I would struggle to obtain permanent or semi-permanent employment. I wished to continue my tattooing career as I had aspirations to open my own tattoo parlour in the future. In September 2011, I accepted the position as a tattooist working out of Shop 3 …. as a means to further advance my career and support my family.
Ms Algie said she and Person 6 went to the same school. Person 6 was one year below Ms Algie and Ms Algie said she knew of her.
When Person 3 first contacted her, Ms Algie had not previously met him. She had heard of him as he went to school with friends of hers. She had not heard at that time that he was associated with an OMCG, only that he lived with Person 6 in Location 3. On a visit to Location 3 Ms Algie caught up with some friends she had not seen for some time. They informed her that Person 3's …. was a Rebel and they were pretty sure that he was also a Rebel.

[15]

Ms Algie's work at Shop 3

Ms Algie's statement included: 14. When I began working out of Shop 3 in September 2011, I was the only tattooist working within the business. I worked on a full-time basis from Monday to Sunday between the hours of 9:00 am - 5:00 pm. I worked 7 days per week for approximately 6 consecutive months. In or around February and March 2012 I worked alongside my partner, Quentin, who commenced work as an apprentice. Quentin began tattooing approximately 3 months after he commenced his apprenticeship. He assisted with preparing the tattoo drawings and designs. During the course of my employment out of Shop 3, I recall there were 4 other tattooists who worked in the business for various periods of time. 15. I was responsible for purchasing and maintaining my own equipment and products (i.e. needles, ink, machines. power boxes, etc.). The business would provide some ancillary supplies (i.e. paper towel, vasoline, cling wrap, etc.). I obtained my own ABN registration which was separate from the Shop 3 business and managed my own superannuation and taxation payments. In this regard, I was advised by my accountant …. in relation to my own finances which were also separate and independent of the Shop 3 business I was also solely responsible for the costs of maintaining my tattooist licence. 16. Whilst working out of Shop 3, I was responsible for managing my own tax invoices for tattooing work performed. After providing tattooing services, I would generate and issue tax invoices which I forwarded directly to Person 6 at the end of the working week. For any given week, my tax invoices would outline the specific amount of my services, which included my superannuation and taxation payments, for which I was paid by the Shop 3 business. …. 21. The only discussions I would have with customers of the business which related to their personal circumstances were for the purposes of determining whether the customer was pregnant, intoxicated, under the influence of drugs and/or other illicit substances and whether they have certain viruses or illnesses which may be transmitted through contact and/or blood (i.e. HIV/AIDS. hepatitis, etc.). ….

[17]

Ms Algie's attendance at a police station on 20 February 2014

Snr Cst Bounds' statement refers to Ms Algie's attendance at a police station where he took her digital fingerprints in relation to her application for the Licence. Snr Cst Bounds said that while taking the fingerprints he had a conversation with Ms Algie which included the following: During the conversation with [Ms Algie] she stated that she was the "owner" and "ran" " Shop 3" in Location 3. Also during the conversation I enquired about her association with any Outlaw Motorcycle Clubs, with [Ms Algie] saying a reply similar to "No".
Ms Algie stated: 23. …. I confirm I attended the …. Police Station on 20 February 2014 for the purpose of providing fingerprint and palm prints as part of my tattooist licence application. I deny stating or otherwise asserting to Police that I was the owner and manager of Shop 3. At this time, I was the head tattooist of the business, Person 3 remained the owner and his partner, Person 6 was the manager (day-to-day operations). As I have tried to distance myself from any associations with outlaw motorcycle gangs in my dealings with people at Shop 3, I denied having any links with outlaw motorcycle gangs. I cannot speak to whether Shop 3 had any links with outlaw motorcycle gangs. I deny stating to Police that the Shop 3 business did not have any links with outlaw motorcycle gangs.
Ms Algie orally denied that she told police at the police station that she was the owner and manager of Shop 3 and denied that she had any association with an OMCG.
Mr Kalyk conceded that the word "association" was not defined. He said it had its ordinary meaning "a link".
[NOT FOR PUBLICATION]
There is no reason apparent to me as to why Ms Algie would make the statement attributed to her more than 3 years ago unless she was not fully appraised of the provisions of the Act and the new focus on the involvement of OMCGs in the tattoo industry. However, there is also no evidence before me of any reason for Snr Cst Bounds to manufacture Ms Algie's statement.
[NOT FOR PUBLICATION] I find that the statement attributed to Ms Algie by Snr Cst Bounds was made by her at the police station.

[18]

Ms Algie's record keeping and compliance with taxation legislation while at Shop 3 and later

The Applicant acknowledged that she knew she had to lodge income tax returns. However, her evidence is that while at Shop 3 she did not file any tax returns.
She said she obtained an ABN registration. When she received her ABN she was told that she needed to meet a GST threshold (to have to lodge a BAS). She said you work for yourself and they (the ATO) explained to me about the GST and stuff like that. Ms Algie said: I know I should have done right but I didn't. My old work used to give me a readout of what I'd earned but Person 3 got in a lot of trouble when it came to tax time because he wasn't putting it all in.
In relation to a GST obligation and the relevant threshold Ms Algie said "I don't know what it was. I would have known back then … I don't know whether I was required to be registered for GST because I don't know what the threshold is when I was at Shop 3."
Ms Algie also said "I know I did wrong by not lodging my tax". Ms Algie did not see her failure to check the relevant GST threshold or to lodge income tax returns for several years as being convenient for her.
Ms Algie's oral evidence included: Question - You obtained your own ABN number? Answer - Yes Question - You owned your own equipment and products? Answer - Yes. Question - You kept your own superannuation and tax records? Answer - Yes Question - Paragraph 15 refers to this. You set up your own finances which were independent of the Shop 3 business. You had your own accountant give you advice. You had your own tattooist licence, you had your own clients separate from Person 3's. Answer - Yes Question - Your clients were not dependent on Person 3? Answer - That's right. Question - You were using Shop 3 just for the premises? Answer - Yes Question - In your statement at paragraph 16 you said you would generate your own tax invoice. You produced no record of those tax invoices did you? Answer - No. Question - And that's because they don't exist? Answer - Yes they do. At the end of each week we have an invoice book, all artists have the invoice book, you put your name, you put your ABN and you put Shop 3 where you write up each day the work and how much we get paid. I advised my solicitors I did have all my invoice books. I recently just moved and I can't find half of it. Shop 3 got shut down so I no longer had anything to keep from there Question - You're telling the Tribunal that you had half your invoice books at home? Answer - I have my copy of each one. I'd give [Person 6] the invoice at the end of each week and she'd pay me. Question - And you haven't produced that to the Tribunal? Answer - No because I don't know where they are. Question - So you're telling the Tribunal that you had the records at one stage but don't have them anymore? Answer - No because I don't know where they are. Question- when did you say you had them? Answer - I moved. I don't know where they are. That's what I told my solicitor. Question - You're aware that under the law you have to keep tax records for a certain number of years Answer - The only problem with that is when Shop 3 shut down due to Person 3 not getting his licence he got in a lot of trouble because he wasn't doing the right thing with our invoices. Same thing with Mr McGilvray. He pays child support so he couldn't even give an estimate of that. A lot wasn't put through the shop, a lot wasn't done legit. Question - when you're saying a lot wasn't put through the shop, leaving aside what happened when you gave certain records to Person 3, you said you kept your own records. Answer - since I moved I can't find them. I looked everywhere. I know I had an obligation to keep them. Question - did you not need those records to produce your own tax returns? You've been working at Shop 3 since September 2011, did you not lodge a tax return for any of those periods? Answer - No, and that is why I know I've got a tax bill.
Ms Algie's earlier evidence that she paid tax and took care of her superannuation was not corroborated by any documentary evidence. I find that her evidence concerning use of her ABN while engaged by Person 3, whose business shut down in December 2015, is contrary to the evidence on the public record that her ABN was only active from 15 February 2016, two months after Shop 3 closed.
Ms Algie's uncorroborated evidence at [15] that she "managed [her] own …. taxation payments" is not consistent with her evidence that she had never lodged a BAS and had not lodged an income tax return since 2011. The reference to having been advised by her own accountant, impliedly while she was working at Shop 3, is somewhat misleading. The accountants, who were not called as witnesses, stated in response to a summons (which Ms Algie did not dispute) that the only work they performed for Ms Algie was advice in relation to the setup of a company. Documents produced under summons indicated that the first date on which the accountants carried out work for Ms Algie was 17 February 2016, some two months after Shop 3 ceased trading.
In summary, on Ms Algie's own evidence, I find that she was aware of certain taxation obligations which applied to her throughout her working life. Her evidence is that from at least 2011 until the date of the hearing, she has largely disregarded those obligations. I do not accept her evidence that she could not comply with those obligations because Person 3 had not kept proper records. There is no evidence that Ms Algie has attempted to rectify her admitted breaches of relevant law.

[19]

Ms Algie's association, affiliation or connection with motorcycle gangs

Ms Algie's written evidence is: 7 I deny having any association, affiliation or connection with any member of an outlaw motorcycle gang in relation to any activities and/or operations of any motorcycle gang. During the course of my career as a body tattooist, I deny having any personal relationship or involvement with any member of an outlaw motorcycle gang in relation to any activities and/or operations of any motorcycle gang. I did not liaise with, socialise with or otherwise associate with any of my past employers or managers outside of my professional duties and responsibilities. …. 20. Throughout the course of my career as a tattooist, I have never knowingly engaged on a personal level with any customers or people who I suspected to be affiliated with Person 3. I have tattooed individuals who I suspected may be affiliated with outlaw motorcycle gangs, such as Rebel members in the past. Throughout my career as a tattooist, I have always been clear to my managers or superiors that I was not prepared to tattoo individuals who wore gang colours or gang related clothing. I did not wish for my clientele or members of the public to perceive me as being in any way connected with any person who I suspected may be affiliated with outlaw motorcycle gangs. Whenever I came into contact, in the course of my employment, with a person who I suspected may be affiliated with an outlaw motorcycle gang (i.e. rendering tattoos, discussing designs and/or prices, providing advice about tattoo care, etc) my reaction would be to only discuss matters concerning my service. I was always extremely careful to distance myself from any personal discussions with them and keep the conversations, if any, focused on the tattoo. 21 …. Throughout the course of my career as a tattooist, I have distanced myself from anyone who I came to know to be affiliated with outlaw motorcycle gangs by not associating with them.
Ms Algie's said that at all times she tried to distance herself from Person 3 and Person 6.
She is aware of the concerns that the Act has with the connection between OMCGs and tattoo parlours.
Ms Algie said her statement included as much as she could on her association with motorcycle gangs. She has explained all her connections with people she believes to be connected with OMCGs between 2003 and 2015.
In her statement Ms Algie said: 19 …. At all material times, I was not informed or otherwise aware of any motorcycle gang activities ….
[NOT FOR PUBLICATION]
[NOT FOR PUBLICATION]
[NOT FOR PUBLICATION]
[NOT FOR PUBLICATION]
Ms Algie stated: 20 ….. Throughout my career as a tattooist, I have always been clear to my managers or superiors that I was not prepared to tattoo individuals who wore gang colours or gang related clothing. I did not wish for my clientele or members of the public to perceive me as being in any way connected with any person who I suspected may be affiliated with outlaw motorcycle gangs ….
Ms Algie was asked if she had a specific discussion with Person 1 about OMCGs. The answer was oblique in that she only wanted to engage in business on a professional level and worked side-by-side with Person 1 and he taught her a lot. On her own evidence Ms Algie said that she did not speak with Person 1 about OMCGs. Ms Algie also said, when discussing her express desire to engage in business on a professional level that she said that because Person 1 made a pass at her one day.
Ms Algie was also asked about her statement at [20] that throughout her career she made it clear to managers or superiors that she would not tattoo individuals who wore gang colours or gang related clothing, when she had said that she did not say that to Person 1.
Ms Algie's response was that when he turned up he had a patch on but she never tattooed him. Ms Algie said that she worked beside Person 1 but "what he does outside work has nothing to do with me".
On several occasions Ms Algie said she had a very good clientele including some people who are elderly. She did not need some person sitting there [in colours] and having my normal clients freaked out.
Ms Algie was asked whether there was any reason why her statement did not say that Person 3 was affiliated with the rebels? She answered obliquely, "No, I just don't know a lot about the bikie gangs."
Ms Algie's evidence in cross-examination included: Question - it's not right to say is it that you've always been clear with your managers or superiors that you are not prepared to tattoo individuals A - If it's come up in conversation that's what I would have said to get my point across. With Person 3 I did tell him straight up. Having been told …. he obviously knew the motorcycle gang. So that's why I told him straight out and I can remember that. It should have been worded a bit more better than that. Q - Did you word it that way in your statement so that it appeared to the Tribunal that you seemed further removed from outlaw motorcycle gangs than you in fact are? A - No not by any means. All the tattoo shops were associated with motorcycle gangs. They owned all the tattoo shops. You don't walk into every shop and ask are you affiliated and then just walk out. You just don't do that. You just, there are some questions you just don't ask Q - You never took any steps to find a job in a shop that wasn't affiliated? A - I didn't. Because most of them are. It is very hard to find one. That is why this law is put in place. Q - The evidence that you were concerned about people perceiving you to be associated with motorcycle gangs is false. A - No because I just didn't want them to think that I was part of any of it.
Contrary to her statement at [20] "I have always been clear to my managers or superiors that I was not prepared to tattoo individuals who wore gang colours or gang related clothing" Ms Algie conceded she could not recall making any such statement to any manager or superior at any tattoo parlour she had worked at other than to Person 3 at Shop 3.
Mr Kalyk submitted that Ms Algie's evidence that she continually and deliberately distanced herself from any involvement with members of OMCGs, while working for over 10 years in OMCG owned and controlled tattoo parlours, for much of which period she was the only or senior tattooist, is inherently implausible. Having regard to my findings of discrepancies in Ms Algie's evidence and my findings in these reasons in respect of confidential information I accept Mr Kalyk's submission.

[20]

Chronology of purchase of Shop 3's assets

Ms Algie's evidence included: 24. It was my understanding that, at this point in time [February 2014], Person 3 was waiting for his operator's licence to be approved and/or renewed for Shop 3. When the Police attended the Shop 3 premises on 18 February 2014. the Officers requested information about the status of Person 3's operator's licence. Around this time, Person 6 said words to me to the effect of, "[Person 3] is waiting for his operator's licence to come through. I have checked the status of the application online and it says it is still being processed." 25. Approximately 2 weeks before Christmas 2015, I was informed that Person 3's application for renewal of the operator's licence had been refused and consequently, the business would be closed. At this time, I had no intentions of purchasing or otherwise taking over the business from Person 3. Around the time when the business was closed, I became aware that another tattooist working alongside me was interested in purchasing and taking over. For reasons unknown to me, this did not eventuate. 26. Person 3 and I had a conversation on 22 January 2016 during which I said words to the effect of, "I would love to own it [the business]." From my perspective, this was a mere pass away comment and wishful thinking as I had aspirations to open and manage my own tattoo parlour in the future. Person 3 then responded, "If you come up with the money, because the other prospective buyers have fallen through, then it's yours." Person 3 had initiated the conversation with me and at this point, expressed a genuine interest in selling. 27. Later that day, I spoke with [a real estate agent] about taking over the lease for [the New Shop] premises across the road from [Shop 3]. I attended her office to sign an agreement, which provided for the sale of the business for $20,000 (which also included some contents remaining in the store, such as beds, sinks, cash register, gloves and other supplies) and to obtain the lease for the [New Shop] premises …. The agreement for sale included a term to the effect of, "[Person 3] the Seller is to have no further involvement with the business." This was extremely important for me as I intended to continue my tattooing career independently and establish my own identity and reputation in the industry. 28. Prior to signing the agreement, I did not have any discussions with Person 3 or Person 6 about the income of the business. I began planning to redecorate and fit out the premises before opening my business. 29. In response to paragraph 10.4 of the Redacted Security Determination filed by the Respondent, I confirm I purchased the Shop 3 business from Person 3 in early January 2016 prior to submitting my application for an operator's licence on 27 January 2016. I took over the lease of premises …. Location 3 from [the agent] in early January 2016. I did not wish to continue the business at the same location as Shop 3 …. as a means of distancing my business and reputation from Person 3.
In cross-examination, inconsistencies between Ms Algie's written and oral evidence as to the chronology of events in January 2015 in respect of the purchase of assets from Person 3's tattoo business and the establishment of her own business became apparent. It is possible that Ms Algie had merely forgotten what happened. However, having regard to the importance she placed on the acquisition and establishment of her own business, I would have thought that if she was being truthful, she would have had a fairly clear recollection of what had happened and been able to recount the events more accurately that she did.
Ms Algie's said that notwithstanding [27] in her statement, she attended the agent's office on 22 January 2016 to sign a lease, not to sign the agreement for sale of the business.
At [29] Ms Algie stated she "took over the lease of [the New Shop premises] …. in early January 2016". However, the signed lease in evidence states that it commenced on 1 February 2016.
The printed lease describes the lessee as "Leah Dawn Algie ABN 24 499 182 953". It is a matter of public record that that ABN, held by Ms Algie, commenced on 15 Feb 2016, 3 weeks after Ms Algie says she signed the lease which included her name and ABN.
I find it highly unlikely that a printed lease containing Ms Algie's ABN could have been signed by her some three weeks before commencement of the ABN.
Ms Algie provided no explanation of the above inconsistencies.
Contrary to [27] of her statement that she signed the sale of business agreement on 22 January at the real estate agent's office, Ms Algie said the sale agreement was signed on 22 January 2016 at the front of the new premises. The typed sale agreement in evidence contains the date 22 January 2016. Ms Algie said Person 3 met with her to sign the sale agreement and received a cash payment of $20,000 at the New Shop premises after he finished work on that date.
Subsequently, Ms Algie said the sale of business agreement was signed on 21 or 22 January. Contrary to her evidence at [26] Ms Algie said the signing was not on the day of the conversation with Person 3, it occurred a couple of days after the conversation.
Ms Algie said she read the sale agreement before signing it and made sure that the details were correct. Ms Algie was asked if she intended keeping Shop 3's business name. Her reply and subsequent questions and answers included: Ms Algie - Yes - I did not take over the lease of Person 3's property. I took a lease of separate premises to distance myself from Person 3. Question - When you bought the business you did not intend to keep the name. Answer - originally I did, but my accountant advised me not to, to have a separate name because otherwise I might have to pay the bills. It would be best for me to have a new ABN and a new name. Question the account you have given of this transaction is false. Answer- what do you mean by that - it happened the way I said Question - you paid $20,000 for the business and did not know what it earned. Prior you said you operated your own business you had your own clients' equipment et cetera Answer - I paid $20,000 for the business so that there would be no bad blood because I knew …. was involved with a motorcycle club. I didn't want anything bad to happen to my business. I didn't want my shop to be effected. I bought the name which I worked very hard for four years. I bought the chairs and stuff out of the shop that I knew that I needed. I wouldn't have got it cheaper if I bought it all brand-new again. It was worth my while in the end.
Ms Algie said this was the only way that she saw that she could distance herself from Person 3. Mr Kalyk suggested that if someone wanted to distance themselves from a person they would not buy his business and his business name.
Ms Algie said "that's why I changed the name. Because I didn't want that."
I find some of Ms Algie's evidence implausible. Her application for the Licence dated 27 January 2016 states that business name under which she will be trading is Name 3. The New Shop lease is for premises across the road from Shop 3. These are not the acts of someone who wanted to distance herself from Shop 3 and Person 3.

[21]

Source of finance for acquisition of business assets from Person 3

Ms Algie said she paid Person 3 $20,000 cash on 22 January 2016 when they both signed a sale business agreement outside her new premises. She did not receive a receipt for the payment.
Ms Algie provided no details in her statement as to the source of the $20,000 price. She conceded that how she paid Person 3 was relevant and she should have included it in her statement.
Ms Algie was asked for details of the source of the $20,000. Initially she did not directly answer the question. Instead she said that she and her partner had saved as much as they could and at the moment her shop doors are shut because she couldn't keep up with the rent.
When pressed, she informed the Tribunal that by January 2016 she and her partner had saved about $7000, which on reflection she thought might have been as much as $7900. This money was kept in cash and not deposited in a bank account. It was originally saved for a family holiday.
Ms Algie said the remaining money came from friends and family.
When asked to identify the friends and family who provided the remaining $13,000 Ms Algie took some time to answer and eventually identified a named friend who provided $1000, an aunt who provided a further $1000 (although she was not sure of the amount and said "don't quote me"), her mother and her partner's mother each provided $500, her father provided two payments each of $500, and she and her partner each received about $500 from Centrelink which was used for the purchase. She said that another friend Person 4, who was a client some years previously, provided most of the money, $500 then $3000 and then $10,000.
Subsequently Ms Algie said the money from Person 4 was not used for the purchase. Some of it was used to repay money borrowed for the purchase. However, the bulk of the money was used to fit out the new premises.
The amount of money identified by Ms Algie as being used for the $20,000 purchase totalled $12,900. Ms Algie said that she could not recall the source of the remaining $7100.
Ms Algie provided no corroboration, whether from bank statements or other documents or from any of the persons who were identified as having provided money, as to the source of money used for the purchase from Person 3. Ms Algie said she and her partner were doing everything they could to raise the money.
Having regard to the importance to Ms Algie of being able to fund the purchase I find her stated lack of recollection of the source of 35% of the funds highly unlikely.
Ms Algie's evidence was that both she and her partner were, at all relevant times, in receipt of regular payments from Centrelink. She conceded that, subject to appropriate thresholds, the amount of the payments she was entitled to receive would vary depending on the amount of her and her partner's assets and income which she was obliged to disclose to Centrelink on a regular and frequent basis. Initially Ms Algie's evidence was that she declared all income she was paid for work.
In the course of considering her bank statements, Ms Algie conceded that her receipts from Centrelink showed no evidence of any relevant disclosure of either assets or income. She conceded that she had not disclosed to Centrelink any details of the assets she had purchased from Person 3 nor the $7900 she said she and her partner had saved which formed a substantial part of the payment.
Ms Algie initially said the new business the subject of the application for a Licence, was hers and then later said that it was her company's and that a substantial amount had been loaned to her by her friend Person 4. However, it appears from Ms Algie's subsequent testimony that the subject loan was provided, not by Person 4, but by her partner Person 5 and that it was not provided to Ms Algie, but was electronically transferred from Person 5's bank account to a bank account held by Mr McGilvray.
Ms Algie said payments were made for the shop fit-out from Mr McGilvray's account but, according to Ms Algie, it was her money.
In my opinion no adequate explanation was provided, nor was there any documentary evidence as to why Person 5 invested money in the business; nor as to why the investment was deposited into Mr McGilvray's bank account rather than that of Ms Algie. No documentary evidence was brought to the attention of the Tribunal as to any financial contribution by Person 4. Nor is there any evidence, other than Ms Algie's oral testimony, that she made any financial contribution to the business. If Ms Algie had made such a financial contribution it would, on her own evidence, have been incumbent on her to inform Centrelink of the relevant assets, whether in the form of cash prior to 22 January 2016, or in the form of business assets thereafter. There is no evidence that Centrelink was so informed.

[22]

Role of Person 4

Ms Algie said Person 4 was the majority shareholder of her company until her loan was repaid.
Ms Algie initially could not recall when she borrowed money from Person 4, but thought it was just after the purchase from Person 3.
Ms Algie said Person 4 and her partner, Person 5 visited Ms Algie's home shortly after the first time Ms Algie phoned Person 3 about the purchase. She informed them that Person 3 wanted to sell his business, she would love to buy it, but she didn't think she could raise the money in time. Person 4 asked if it would be a good investment for her [Ms Algie] and Ms Algie said it would be if the shop can open.
Ms Algie said Person 4 and her partner lent her the money out of the goodness of their hearts. She said she would pay 5% to 10% interest on the loan. Her evidence was that on 21 January she did not know what kind of security would happen. The accountant said the best way is to go through a company, Ms Algie should make Person 4 a director and a major shareholder as security for the loan. Ms Algie accepted the advice.
Ms Algie said that once the loan was repaid, Person 4 would cease being a director and would transfer her shares to Ms Algie.
No time frame was mentioned for repayment of the loan. No documentation concerning the loan, the repayment arrangement, the transfer or buy-back of the shares issued to Person 4 or any requirement for her to relinquish her position as director was brought to the Tribunal's attention.
ASIC records in evidence show that Person 4 applied to register the company on 22 February 2016 with Ms Algie as a director beneficially owning 48 of the 100 issued shares and Person 4 a director and beneficial owner of the remaining 52 shares.
I find that Ms Algie is a minority shareholder in the company she said was hers. On the material provided to the Tribunal, the company was at least from first registration, controlled by Person 4. There is no documentary evidence that Person 4 made any financial contribution to the company.
Ms Algie said the loan from Person 4 was only documented in bank statements, that was why the company paperwork provides that Person 4 is a director and shareholder. There are no documents showing that money transferred from Person 5 to Mr McGilvray's bank account was a loan from Person 4 to Ms Algie.
I find Ms Algie's evidence concerning the loan and the security structure implausible, especially to the extent that a chartered accountant engaged by Ms Algie would advise her that Person 4, who had not personally provided any funds, should be a director and the majority shareholder in Ms Algie's company, (the intended recipient of the funds), and that there was no documentation as to how the loan arrangement and security would be unwound on repayment of the loan.

[23]

Notification to Fair Trading

Ms Algie said she had read the whole of the Fair Trading Fact Sheet in evidence entitled "Applying for an operator licence" including the segment that dealt with Close Associates. I have regard to this evidence and Ms Algie's evidence that she notified Fair Trading that a person who was to have been an employee who had been regarded as a "close associate" would no longer be employed in the new business. I find that Ms Algie was aware at all relevant times of her legal obligation to notify Fair Trading of changes in close associates.
Ms Algie acknowledged that there was no reason why she did not identify Person 4 as a close associate in her statement to the Tribunal. She said she did not think it was relevant where money came from and the only close associates were people who worked in the tattoo parlour business.
However, the meaning of "close associate" which Ms Algie said she read in the Fair Trading Fact Sheet includes a person who: holds or will hold any relevant financial interest relevant power in the business of the applicant and because of that interest or power is, will be able to, exercise a significant influence over the management or operation of the business; or holds or will hold any relevant position in the business of the applicant that will be carried out under the licence. Relevant financial interest in relation to a business is defined to include "any share in the capital of the business". Relevant position is defined to include "the position of director".
These definitions accord with s 4 of the Act.
I do not accept Ms Algie's evidence that she thought that only employees of the business were included in the definition of close associates. Nor do I accept that Ms Algie believed that a person who allegedly provided substantial money to a company which was going to own the tattoo parlour the subject of the Licence application, and who was the majority shareholder and a director of the company, was not a close associate as defined.

[27]

Fit and proper person

The Respondents appropriately submitted at [23] "The expression "fit and proper" is not defined in the TP Act or the TP Regulations."
The issue of whether a person is "fit and proper" in various contexts has been dealt with on numerous occasions by courts and tribunals.
In Hughes and Vale Pty Ltd v State of New South Wales (1955) 93 CLR 127 Dixon C.J., McTiernan and Webb JJ said at [9] that the expression 'fit and proper person' generally involves honesty, knowledge and ability.
In Australian Broadcasting Tribunal v Bond (1990) 94 ALR 11 the High Court observed that the expression "fit and proper person" takes its meaning from its context. In certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.
The question of whether Ms Algie is a fit and proper person to have a Licence involves a value judgment to be made in the context of the particular activity to be undertaken.
The Respondent referred to propositions outlined in a recent appeal to the Appeal Panel of this Tribunal in respect of a decision to refuse a tattooist licence. In Austin v Commissioner of Fair Trading & Commissioner of Police [2016] NSWCATAP 179 the Panel upheld the decision of Montgomery SM in Austin v Commissioner for Fair Trading + Commissioner of Police, NSW Police Force [2015] NSWCATAD 244. The Tribunal at first instance said at [30]: In Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 Walters J said: "In my opinion what is meant by that expression is that the Applicant must show not only that he is possessed of a requisite knowledge of the duties and responsibilities devolving upon him as the holder of a particular licence ... but also that he is 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."
There is no evidence before me to the effect that Ms Algie is not possessed of a requisite knowledge of duties and responsibilities. However, the evidence that Ms Algie has in the past appropriately exercised all relevant duties and responsibilities arising under legislation to which she is both subject and of which she is aware rests solely with her unsupported assertion that she has complied and will continue to comply with the Act and is to be contrasted with her admissions that she has in the past and continues to, fail to comply with other legislative obligations to which she is subject.

[28]

Public interest

The Respondent submitted at [31] that the expression "public interest" is not defined in the Act or the Regulations, and at [32] the Respondent provided an extract from Smith at [42] to [47] as follows: "The Courts and the Tribunal have held that the concept of the 'public interest' is designed to give the broader interests of the community priority over private interests. In Comalco Aluminium (Bell Bay) Ltd v O'Connor and Others (1995) 131 ALR 657 at 681, Wilcox CJ and Keely J said: The purpose of the reference to public interest is to ensure that private interests are not the only matters taken into account: to make clear that the interests of the whole community are matters for the Commissioner's consideration. The effect of the reference is to amplify the 'scope and purpose' of the legislation. Discretion to make a decision "in the public interest" is not confined except by the scope and purpose of the legislation itself: O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210 at 216 per Mason CJ, Brennan, Dawson Gaudron JJ. Applying a public interest test is a question of fact and degree: Re Queensland Electricity Commission and Ors; Ex parte Electrical Trades Union of Australia (1987) 72 ALR 1 at 5. In Director of Public Prosecutions v Smith [1991] VicRp 6; (1991) 1 VR 63 the Court held: The public interest is a term embracing matters, among others, of standards of human conduct and of the functioning of government and government instrumentalities tacitly accepted and acknowledged to be for the good order of society and for the well-being of its members. The interest is therefore the interest of the public as distinct from the interest of an individual or individuals. In Commissioner of Police v Toleafoa [1999] NSWADTAP 9 at paragraph [25] the Tribunal's Appeal Panel said: The "public interest" is an inherently broad concept giving the appellant the ability to have regard to a wide range of factors in choosing whether to exercise a discretion adversely to an individual. The Tribunal has also found that an Applicant's personal interest in retaining his licence cannot outweigh the public interest in having full confidence in the professionalism of people involved in the security industry: Blissett v Commissioner of Police, New South Wales Police; Webb Protection Australia Ply Ltd v Commissioner of Police, New South Wales Police 12006] NSWADT 114 at paragraph [32]. In Constantin v Commissioner of Police, NSW Police Force (GD) [2013] NSWADTAP 16 at paragraph 133] the Appeal Panel held: The 'public interest' allows. we consider, for issues going beyond the character of the applicant to be taken into account. These may include concerns in relation to public protection. public safety and public confidence in the administration of the licensing system." (emphasis added)

[30]

Decision and orders

Having regard to the findings I have made above: 1. I am not satisfied that Ms Algie fully disclosed to the Secretary or the Tribunal all relevant details of close associates involved in her proposed business the subject of the Licence application. 2. I am not satisfied that Ms Algie has disclosed to the Tribunal full details as to the financing of her acquisition of tattoo parlour assets from Person 3. 3. I am not satisfied that Ms Algie has disclosed to the Tribunal the whole of her relationship with third parties as to the ownership and control of the proposed tattoo parlour business the subject of the Licence application. 4. I am not satisfied that Ms Algie has been truthful in her evidence to the Tribunal. 5. [NOT FOR PUBLICATION] 6. I am not satisfied that, at the time of making her application for the Licence, Ms Algie intended to separate her new business from that previously operated by Person 3. 7. I am not satisfied that while performing tattoo procedures as a licensed tattooist Ms Algie ensured that a record was made in a tattooing procedures log of all relevant procedures in accordance with clause 23 of the Tattoo Parlours Regulation 2013. 8. [NOT FOR PUBLICATION]
I am satisfied that there is evidence before the Tribunal, including by her own admission, that Ms Algie has not complied with other legislative obligations of which she was aware over a period of several years, such as her obligations to lodge income tax returns and her obligation to provide full details of relevant assets and income to Centrelink.
Having regard to the above findings on the material before me, I am satisfied that at the present time: 1. Ms Algie is not a fit and proper person to be granted an operator licence, and 2. it would be contrary to the public interest for an operator licence to be granted to her.
Accordingly, the correct and preferable decision of the Tribunal is that the Licence should not be granted.
The Tribunal's orders are: 1. The decision to refuse to grant Ms Algie's application for an operator licence under the Tattoo Parlours Act 2012 is affirmed.

At a glance

Court

Decision date

Source

Judgment (31 paragraphs)

Parties

Cases Cited (13)