Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Limited

Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Limited - [2006] NSWSC 343 - NSWSC 2006 case summary — Zoe

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JUDGMENT 1 JOHNSON J: This is an appeal under s.56(1)(c) Crimes (Local Courts Appeal and Review) Act 2001 ("Appeal and Review Act") by the Plaintiff, the Director of Public Prosecutions, against orders made by a Magistrate at the Wollongong Local Court on 2 September 2005 dismissing proceedings against the Defendant, Illawarra Cashmart Pty Limited, in respect of five charges of not ensuring that a tag, label or attachment bearing a contract number or stock number was attached to an item taken in trade or pawn during the course of the licensee's business contrary to clause 18A(1) Pawnbrokers and Second-Hand Dealers Regulation 2003 ("PSD Regulations"). 2 The Defendant was charged with 43 offences under the Pawnbrokers and Second-Hand Dealers Act 1996 ("PSD Act") and the PSD Regulations. The proceedings relating to these alleged offences were heard together before Mr CL Thompson, Magistrate, at the Wollongong Local Court over five sitting days in August and September 2005. Of the 43 charges, his Honour found 14 offences proved and the balance of the charges were dismissed. The present appeal relates only to the dismissal of five charges under Clause 18A PSD Regulations. 3 The proceedings were prosecuted in the Local Court by a police officer. In accordance with usual practice, the Director of Public Prosecutions has taken over the proceedings under s.9 Director of Public Prosecutions Act 1986 and has instituted and is conducting the present appeal on behalf of the prosecution. 4 An appeal by a prosecutor under s.56(1)(c) Appeal and Review Act may be brought only on a ground that involves a question of law alone. In this case, the Plaintiff submits that error involving a question of law alone has been demonstrated. The Defendant submits that the Plaintiff's appeal raises a question of fact, or a question of mixed fact and law, and that the appeal ought be dismissed for that reason. 5 Further, the Defendant has filed a Notice of Contention pursuant to Part 51B r 18 Supreme Court Rules asserting that the decision of the Local Court should be affirmed on grounds other than those relied upon by the learned Magistrate.

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The Local Court Decision 15 Before turning to his Honour's reasons for dismissing the subject charges, it is appropriate to bear in mind that his Honour's reasons constitute an unedited and unpunctuated record of ex tempore remarks in a busy Magistrate's Court: Acuthan v Coates (1986) 6 NSWLR 472 at 479A, 485C-D. Such a judgment should not be picked over and appropriate allowance should be given to the pressures under which Magistrates are placed by the volume of cases coming before them: Neighbourhood Association DP295386 v Forgeron (2005) NSWCA 150 at paragraph 15; Colosimo v Director of Public Prosecutions (2005) 155 A Crim R 573 at 583 (paragraph 36). That said, there are some features of this case which call for further comment. 16 His Honour had before him some 43 charges which fell for determination. It appears that, following the evidence, his Honour moved to determine the charges in groups. His Honour did not deliver a discrete judgment containing reasons for dismissing the five charges which are the subject of the present appeal. There is no ground of appeal alleging error of law on the part of the learned Magistrate in failing to give reasons as required by law for dismissing the charges. Nevertheless, the manner in which his Honour determined these charges and explained his reasoning for that course, has given rise to an additional debate in this Court as to the precise reasons for dismissing the charges. 17 In Adecco v Gemvale Constructions Pty Limited [2004] NSWCA 449, Santow JA (Mason P and Sheller JA agreeing) said at paragraph 41: "It is clear that the duty to give reasons is a necessary incident of the judicial process. Without adequate reasons, justice has not been seen to be done, so that failure to give adequate reasons may be an error of law: Pettitt v Dunkley (1971) 1 NSWLR 376; Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 at 278-279 per McHugh JA; Mifsud v Campbell (1991) 21 NSWLR 725; Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430. But the duty does not require the trial judge to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings." 18 One of the conventional functions of the requirement to give reasons is that a statement of reasons may be necessary to enable a party to exercise a right of appeal or such other rights as the party may have to contest the decision: Pettitt v Dunkley (1971) 1 NSWLR 376, 387, 388; Donges v Ratcliffe (1975) 1 NSWLR 501 at 507; Housing Commission of NSW v Tatmar Pastoral Co Pty Limited (1983) 3 NSWLR 378 at 386. The defendant and the prosecutor have a statutory right of appeal to this Court under the Appeal and Review Act arising from the determination of criminal proceedings in the Local Court. 19 It is not satisfactory that an appeal court is left to undertake an analysis of exchanges between the bench and counsel during submissions in an attempt to ascertain a magistrate's reasons for determination: R v Pham [2005] NSWCCA 94 at paragraph 11; R v Thompson (2005) 156 A Crim R 467 at 474-5 (paragraph 32). The provision of concise reasons as required by law will avoid this circumstance occurring. It is necessary that magistrates keep in mind the obligation to provide reasons when determining summary proceedings under s.202 Criminal Procedure Act 1986. 20 Having heard submissions from the prosecutor, the learned Magistrate received submissions, written and oral, from Mr Kell for the then Defendant. To set his Honour's statements in context, it is appropriate to pick up the following extract from the transcript (T274.8-275.17): "KELL: Your Honour can I just address the regulation 18A ones first separately which is the written note. HIS HONOUR: You want the written note, yes. KELL: So that your Honour deals with the charges on the schedule which are numbered 24, 34, 37 -- HIS HONOUR: Let me just - 24 -- KELL: 34. HIS HONOUR: 34. KELL: 37, 39 through to 41 and also number 33. That's slightly different. HIS HONOUR: Let me put this to you, perhaps more to the prosecution you've had a chance of reading those submissions Sergeant. PROSECUTOR: Yes well I think … (not transcribable) ... answers to those anyway. HIS HONOUR: I've looked at it extremely carefully, I mean I must accept that regulation 18A doesn't impose a time limitation. KELL: Yes. HIS HONOUR: The question is whether under those circumstances what time limitation do apply. The other thing that occurs to me in relation to that, he said it does make specific reference to items taken or during the course of a business - of the licensee's business. Part of the business is to sell goods once that's taken. If he's prohibited by section 21 from in fact selling them then he wouldn't be during his normal course of business, I would have thought, and the obligation under that is to tag them or label them during the course of his business. KELL: Which is a subsidiary, it's not using section 21 on a direct clash. HIS HONOUR: Section 21 is quite specific, they must not, it's mandatory, they cannot dispose of those goods, if so it limits his business at that particular point of time, it doesn't become his ordinary course of business as far as I'm concerned. KELL: And for that reason if he forms a time requirement. HIS HONOUR: Now the only thing is and in relation to each of those particular matters it is suggested, there's just so much evidence and they all fall within the 14 day period. KELL: Subject to charge number 33. HIS HONOUR: Yes that was the Chinese -- KELL: China statue but all the others yes, 14 days and the invoices. HIS HONOUR: You agree with that Sergeant? PROSECUTOR: Yes. HIS HONOUR: Well I'm prepared to uphold that submission." 21 It appears, from what occurred later, that his Honour at this point dismissed the five charges which are the subject of this appeal. Submissions proceeded with respect to other charges and his Honour found a number of other offences proved (T284-285). His Honour enquired as to whether all matters had been disposed of and the following exchange is recorded in the transcript (T285.12): "HIS HONOUR: In that matter I also find that offence proven. Is that all matters now? KELL: I think so your Honour. PROSECUTOR: Your Honour's said things about the 18A matters, so all the 18A matters are they then 43 the Chinese statue? HIS HONOUR: No, no the Chinese statue I found proven. The others were dismissed. PROSECUTOR: On the basis that -- HIS HONOUR: Well on the basis that the time under regulation 18A is not stated and refers to during the course of business - I would take that to mean during the course of the normal business. The fourteen day period under section 21 as I understand it prohibits the selling or the putting up for sale of any item. It would seem to me that in the absence of any time, whether that's an error in the drafting or not you know I'd take the argument Mr Kell put up, what time do I apply. Do I use the term fair and reasonable time? If I was not to consider the fourteen day period just exactly what time do I apply? I would think that that would be an appropriate time to apply and if it was a fair and reasonable time certainly being prohibited from going about the normal course of business for fourteen days and holding them, I believe, was such that I am satisfied that I should not have found those offences proven and I have already made that ruling. PROSECUTOR: Yes I know you've already made a decision. I'm not grappling with your Honour's decision I was just clarifying. KELL: I think that is all of the -- HIS HONOUR: That's all the matters, yes thank you Mr Kell. You wish to make submissions now in relation to the sentence on the matters which I have found the offences proven." 22 I approach the resolution of the matters raised in this appeal upon the basis that his Honour's reasons for dismissing the five subject charges are contained in his comments in the course of Mr Kell's submissions (when it appears that the decision to dismiss the charges was actually made) and at a later time when, following an enquiry by the prosecutor, his Honour provided a further explanation for the course taken in dismissing these charges.

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(b) in determining (as far as it can be ascertained from his Honour's ruling) that in the absence of any specified time requirement in clause 18A, an appropriate time to apply to the obligation to label or tag the items is 14 days, being 14 days in the course of the licensee's (ordinary) business (that is, not including the 14-day holding period). 25 Ms Woodburne submits that the learned Magistrate held that the words "the course of the licensee's business" should be taken to mean "the normal course of the licensee's business" which, his Honour said, was to sell goods. Since s.21 PSD Act prohibited the licensee from selling goods for a period of 14 days, that period did not constitute the "normal" course of business and there was no obligation to tag or label the goods during that time. 26 It was submitted that this reasoning revealed error of law in a number of respects. Firstly, in determining what was "the course of the licensee's business", the Magistrate erroneously implied the words "ordinary" or "normal" into the legislation and then used these words to restrict unjustifiably the course of the licensee's business to the conduct of selling the goods. In reading the words "ordinary" or "normal" into the legislation, the Plaintiff submitted that his Honour failed to have regard to the other words of the section, namely "items taken in trade" which made patently clear that clause 18A applied to the very goods the subject of the proceedings because they were "items taken in trade … during the course of the licensee's business". Had his Honour had regard to the words "taken in trade", it would have been clear that the course of the licensee's business could not be confined to the act or process of selling the goods, but rather included the whole course of the licensee's business, including the taking of goods in trade, the holding of those goods for 14 days and the selling of the goods, which business was regulated by the PSD Act and the PSD Regulations. 27 The Plaintiff submits that, the goods having been "taken in trade … in the course of the licensee's business", the Defendant was required by clause 18A(1) to ensure that each item had its contract/stock number reproduced on a tag, label or other attachment to the item. 28 The Plaintiff submits that the learned Magistrate's approach in this case was to exclude effectively the 14-day holding period from the time for compliance with clause 18A on the basis that "the obligation … is to tag them or label them during the course of his business" (T274.45), meaning the "ordinary" or "normal" course of the business. The Plaintiff submits that this approach involved a misinterpretation of clause 18A(1) leading to it being read as follows: "… a licensee must ensure that the contract number or stock number for each item taken in trade … is reproduced on a tag, label or other attachment to the item during the ordinary course of the licensee's business"

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The Defendant's Submissions 33 Mr Kell, for the Defendant, submits that the appeal should be dismissed at the threshold as it raised a question of fact or, at most, a question of mixed fact and law and not a question of law alone. It was emphasised that s.56(1)(c) Appeal and Review Act limited the prosecutor's right of appeal to a ground that involves a question of law alone. 34 The Defendant submits that, where a statutory provision does not specify a time period for the doing of a particular act, the courts will imply a requirement that the Act be done within a reasonable period: R v Skurray (1967) 86 WN (Pt 1) NSW 1; Deputy Commissioner of Taxation v Ganke (1975) 1 NSWLR 252; New South Wales Grains Board v Davis (Court of Criminal Appeal, 17 July 1997, BC9703434); Pearce and Geddes, Statutory Interpretation in Australia, 5th edn, 2001, paragraph [6.50]. 35 The Defendant submits that clause 18A contains no specific time requirement as to when the tag or label is to be attached to the item. Clause 18A was contrasted with s.28(1) PSD Act which requires a pledge contract record to be made "at the time possession of goods is taken under an agreement by which the goods are pawned". The Defendant submits that a reasonable time requirement should be implied into clause 18A PSD Regulations. It is submitted that the principal question arising in the appeal relates to whether the Defendant had failed to affix labels to the items within a reasonable time. The Defendant submits that this is a question of fact or, at most, a question of mixed fact and law. It is submitted that a question of law alone is not raised. The Defendant relies upon R v Skurray at 8; Neal v Commissioner for Superannuation (1987) 76 ALR 281 at 290-291; New South Wales Grains Board v Davis at 5-6; Harts Australia Limited v Commissioner, Australian Federal Police (2002) 117 FCR 358 at 394-395 (paragraph 142). 36 The Defendant submits that the question in this case is whether the Defendant had affixed the tags or labels within a reasonable time implied into clause 18A and that this raises a question of fact. It is submitted that determination of the matters which could be taken into account in considering whether the Defendant had affixed the labels within a reasonable time (including, for example, the factual circumstance that items could not be disposed of by the Defendant within an initial 14-day period) raised, at most, a question of mixed fact and law. In either case, the Defendant submits that a question of law alone is not raised and that the appeal should he dismissed. 37 The Defendant submits that it is not to the point that an appellate court may be inclined to disagree, even strongly, with the approach taken by the learned Magistrate in terms of a finding of a question of fact or of mixed fact and law. There is no error of law simply in making a wrong finding of fact: Waterford v Commonwealth of Australia (1986-1987) 163 CLR 54 at 77.

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The Defendant's Submissions on the Notice of Contention 39 The Defendant advanced four alternative contentions as to why the appeal should be dismissed in any event. 40 Firstly, the Defendant contends that s.21 informs the content of the requirement of a reasonable period of time that is necessarily implied into clause 18A PSD Regulations. Section 21 dictates that, during the initial 14-day period, the goods cannot be disposed of or offered for sale by the Defendant and the form of the goods cannot be altered in any way. During this period, the item has already been the subject of a contract record created at the time of acquisition (s.16 PSD Act; clause 13 PSD Regulations). The licensee is required to produce the contract on demand to an authorised police officer (s.17) and an electronic version of the record is required to be sent to the Commissioner of Police within three days (clause 16 PSD Regulations). In these circumstances, the Defendant contends that the requirement of a reasonable time to affix the label extends to the 14-day period although the relevant time periods before the penalty notices were issued were in fact less than 14 days, namely between six and 11 days, in this case. 41 Secondly, the Defendant contends that, in circumstances where the licensee cannot dispose of or display the goods for sale during the 14-day period, that period does not form part of the course of the licensee's business within clause 18A so that there is no contravention of clause 18A where a tag or label is not affixed until after the 14-day period. 42 Thirdly, the Defendant submits that s.21(1)(b) PSD Act provides that within the 14-day holding period the licensee "must not alter the form of the goods … in any way". The Defendant submits that the act of attaching a sticker label to an item does "alter" the form of the goods. This is particularly so in the case of many small items that are routinely obtained by a pawnbroker where the attachment of a label will obscure most of the product. The Defendant submits that the word "alter" in s.21(1)(b) is a word of wide import, particularly when coupled with the term "in any way". It is submitted that the term comfortably encompasses the attachment of an obtrusive sticker label that may be difficult to remove. 43 The Defendant submits that s.21 PSD Act ought have primacy over clause 18A PSD Regulations. The obligation not to alter the item under s.21 must prevail over the obligation (if it exists) to affix a tag or label to the item under clause 18A. 44 Fourthly, the Defendant submits that clause 18A does not require that the tag or label be affixed to the relevant item and that the Defendant satisfied the requirements of the provision in respect of each of the five matters charged. There was no issue that the Defendant did in fact create tags for the five products within a short period of time. The five tags so created had not been affixed to the items at the time of the police audit, but were positioned relatively close by the items. The Defendant submits that this satisfied the requirements of Clause 18A. 45 In summary, the Defendant submits that the Magistrate's decision to dismiss the five charges under clause 18A ought be upheld on one or other of the bases advanced by the Defendant in this Court.

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The Plaintiff's Response 46 With respect to the arguments advanced in the Notice of Contention, the Plaintiff submits that clause 18A PSD Regulations, properly construed, requires that a tag or label be physically affixed to the relevant item. It is submitted that the grammatical or literal meaning of clause 18A is clear and that a construction flowing from the ordinary meaning of the words serves to promote the purpose or object underlying the statutory provision: s.33 Interpretation Act 1987. The extrinsic material comprising the Second Reading speeches tends to confirm that the meaning of clause 18A is the ordinary meaning conveyed by the text of the provision: s.34(1)(a), (2)(f) Interpretation Act 1987. 47 In the course of the Second Reading Speech with respect to the Pawnbrokers and Second-Hand Dealers Bill 1996, the Minister for Fair Trading identified the purpose of the legislation in the following terms (Hansard, Legislative Assembly, 24 April 1996, page 438): "The purpose of this bill is to establish a new regulatory scheme for pawnbrokers and second-hand dealers. The scheme involves streamlined licensing of pawnbrokers and second-hand dealers who deal in high-risk-of-theft goods. It also requires licensees to observe certain minimum standards of conduct, including record keeping." 48 When introducing the Pawnbrokers and Second-Hand Dealers Amendment Bill 2002 (which led to the enactment of the PSD Regulations 2003), the Minister for Fair Trading reiterated that the main purpose of the PSD Act was to restrict the trade in stolen goods. He said (Hansard, Legislative Assembly, 30 October 2002, page 6182): "This is done by regulating the industry through an occupational licensing regime and having evidence of identity and record-keeping requirements. The Act also aims to constrain the exercise of market power in respect of the provision of pawn broking services and to provide a mechanism to facilitate the return of stolen property to rightful owners quickly and equitably."

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Towards the end of the second reading speech, the Minister said: "This bill enhances the existing pawnbroking and second-hand dealer licensing regime. It ensures that the objectives of the legislation - to restrict the trade in stolen goods, to provide consumer protection to those who use pawnbroking services and to provide a mechanism to facilitate the return of stolen property to rightful owners quickly and equitably - continue to be met in the most efficient and effective way." 49 The Plaintiff points to the thorough and far-reaching statutory scheme enacted by the PSD Act and Regulations. The Act is an "Act to provide for the licensing and regulation of pawnbrokers and dealers in certain classes of secondhand goods". Part 2 of the Act provides for the licensing of pawnbrokers and second-hand dealers. Part 3 provides for the regulation of licensed businesses. Section 43 makes provision for regulations to be made for the purposes of the Act. In particular, regulations made be made for or with respect to the carrying on of a business as a second-hand dealer or pawnbroker or both: s.43(c1) PSD Act. A regulation may create an offence punishable by a penalty not exceeding 20 penalty units: s.43(2) PSD Act. 50 The Plaintiff submits that it is apparent that the PSD Act and Regulations established a comprehensive scheme of licensing and regulation of the business of pawnbrokers and dealers in second-hand goods. The statutory scheme includes a requirement that business and storage premises be nominated (s.12), that the licensee must obtain documentary evidence of the seller's identify before accepting goods offered for sale and the licensee must not accept any goods offered for sale where the licensee believes the goods are not the property of the seller or that the seller is not authorised to sell them (s.15). A licensee must keep records in the manner and containing the particulars prescribed by the Regulations, of all transactions for the acquisition and disposal of second-hand goods (s.16). An authorised officer may require the production of such records (s.17), take temporary possession of any record for the purpose of making copies or notes of it (s.18) and may enter any business or storage premises and inspect goods (s.20). 51 Part 3 of the PSD Regulations makes detailed provision with respect to records (see, in particular, clauses 11, 13(2) and 16 PSD Regulations). 52 The Plaintiff submits that the extent to which the business of pawnbrokers and second-hand dealers is regulated, particularly as to licensing and record keeping, indicates that the purpose of the PSD Act and Regulations is to regulate, in the public interest, the business of those who deal in high-risk-of-theft goods by requiring licensees to observe certain minimum standards of conduct, including record keeping. 53 Insofar as the Defendant's Notice of Contention asserts that it had satisfied the requirements of clause 18A, the Plaintiff submits that this contention ought be rejected. The Plaintiff submits that the obligation under clause 18A(1) was not satisfied by the mere creation of a record pertaining to the acquisition of the goods. Nor was the obligation under that clause satisfied by the provision, by electronic means, of the record relating to the acquisition of the goods to the Commissioner of Police. Nor was that obligation satisfied by the production to police of records relating to the purchase at the time of inspection or by the production to police of the labels which had been prepared for, but not affixed to, the items. The Plaintiff emphasises that the Defendant created labels to be affixed to the items but had not done so for several days before the police inspection. Although the Defendant may have satisfied other requirements of the PSD Act and Regulations, the Plaintiff submits that there was a clear failure to comply with the requirements of clause 18A with respect to each of the five items. 54 The Plaintiff submits that the Defendant's argument based upon a desire not to "alter" the items by affixing labels to them does not provide a basis upon which the learned Magistrate's orders may be upheld. In effect, the Plaintiff submits that the Defendant cannot avoid the obligation to comply with clause 18A by the selection of a type of a tag or label, in the form of a sticker, which may adhere to and in some way obstruct parts of an item. Clause 18A does not require the application of a sticker. In any event, the five items which are the subject of this appeal were not small. 55 The Plaintiff submits that s.21 PSD Act is directed to the holding of the goods for a period of time during which the goods cannot be altered or disposed of in a manner which would interfere with the investigation of or restoration of stolen goods. The tagging or labelling of goods, even if done by way of a sticker, is not something which adversely affects either the investigation of or restoration of the goods. 56 The Plaintiff submits that the tagging or labelling of the goods facilitates the investigation and identification process which is fundamental to the statutory scheme contained in the PSD Act and Regulations. A construction of clause 18A that requires the affixing of the tag or label to the item at the time of purchase promotes the underlying purpose or object of the Act. It may be that a licensee will accumulate a large number of items in the course of the licensee's business. A practice of placing the tag or label near, but not attached to, the item runs the risk that items and labels will become confused. This would not serve to promote the purpose or object of the statutory provisions in question. A construction of clause 18A which requires the affixing of the tag or label to the item would, on the other hand, serve that purpose. 57 The Plaintiff submits that none of the arguments advanced by the Defendant in its Notice of Contention ought lead to the affirming of the Local Court's decision to dismiss the five charges.

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Resolution of Competing Submissions 58 Section 56(1)(c) Appeal and Review Act confines a prosecutor who appeals to the Supreme Court against an order of acquittal in summary criminal proceedings to a ground that involves a question of law alone. There is no universally applicable test for distinguishing questions of law from questions of fact: Collector of Customs v Agfa-Gevaert Ltd (1995) 186 CLR 389 at 394; Sood v R [2006] NSWCCA 114 at paragraph 30. 59 The formulation "question of law" employs general words capable of application at different levels of generality: Attorney General for NSW v X (2000) 49 NSWLR 653 at 660 (paragraph 25). The expression "question of law" is wider than "error of law": Attorney General for NSW v X at 677 (paragraph 124). 60 A mixed question of fact and law does not fall within the description of "question of law alone": Williams v The Queen (1986) 161 CLR 278 at 287, 314; Attorney General for NSW v X at 663 (paragraph 44). 61 That an appeal to this Court by a prosecutor from an acquittal in summary criminal proceedings is confined to a question of law alone is not surprising. Such an appeal constitutes a statutory exception to the rule against double jeopardy: Davern v Messel (1983-1984) 155 CLR 21 at 30. 62 However, a decision of a court of summary jurisdiction acquitting a defendant has never been regarded with the same sanctity as the verdict of a jury and the consistent trend of legislation, both in England and Australia, has been towards allowing the prosecution to appeal against an order of a Magistrate dismissing a charge and empowering the Supreme Court on appeal to quash the order: Davern v Messel at 37-38. 63 To assist a conclusion as to whether this appeal involves a ground which raises a question of law alone, it is necessary to consider the proper construction of clause 18A PSD Regulations. The contemporary approach to statutory interpretation is literal but not literalistic and requires words to be construed in their total context: Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113 at 141 (paragraph 115). In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, McHugh, Gummow, Kirby and Hayne JJ said at 381 [69] and 384 [78] (footnotes omitted):

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When Does the Licensee's Obligation to Ensure that a Tag or Label is Affixed to the Item Arise ? 69 Clause 18A(1) does not provide expressly that the tag or label is to be attached to the item at the time when the licensee takes in trade or pawn the item during the course of the licensee's business. In construing clause 18A, it is appropriate to have regard to statutory context. Clause 18A lies within an elaborate scheme contained in the PSD Act and Regulations which is designed to regulate, in the public interest, the business of those who deal in high-risk-of-theft goods by requiring licensees to observe certain minimum standards of conduct, including record keeping. 70 Clause 18A requires the physical attachment to an item of a tag or label containing the relevant contract or stock number. The purpose of such a requirement seems clear enough. Compliance with this requirement will allow immediate inspection by a police officer or other authorised person (s.3(1) PSD Act) with the view to identifying and confirming the item and its origins. The item and the tag or label will be linked physically. The authorised person will be able, without further inquiry, to inspect the item and its tag or label. This process serves to promote the purpose of clause 18A viewed in its statutory context. 71 A "contract number" or "stock number", as defined in clause 18A(2), is to be allocated to the item promptly by the licensee who takes an item in trade or pawn during the course of the licensee's business. A licensee must ensure that a contract or stock number for each item so taken is reproduced on a tag or label which is physically attached to the item. 72 As a matter of statutory construction, there appears to be little scope for implying that a period ought be allowed for this to be done extending beyond the creation of the contract or stock number and the immediate creation of a label or tag to be affixed to the item. Compliance with clause 18A requires the prompt affixing of the tag or label to the item. 73 The requirement imports an element of immediacy. The licensee is to ensure that such action is taken promptly. It is not consistent with the words of clause 18A, viewed in its statutory context, that action required under the clause might be delayed for reasons of convenience to the licensee. 74 The mandatory terms of clause 18A operate at all times when a licensee takes an item in trade or pawn during the course of the licensee's business. Clause 18A is not a provision whereby an obligation to act in a particular way is only triggered by a demand or request being made, for example, for production of documents or information. There is an on-going obligation on a licensee to ensure that a contract or stock number for each item taken in trade or pawn during the course of the licensee's business is reproduced on a tag or label which is then physically attached to the item. The legislative scheme contained in the PSD Act and Regulations requires the creation of such a number and reproduction of it on a tag or label which is then affixed physically to the item at or very soon after the time when the item is taken in trade or pawn. 75 It is erroneous to conclude, as the learned Magistrate has done, that the phrase "during the course of the licensee's business" does not extend to include the 14-day holding period when the item cannot be sold under s.21 PSD Act. The item in question is taken by the licensee in trade or pawn when the licensee receives the item in the course of the licensee's business. The item must be stored in a specified part of the licensee's business premises to comply with s.21(1)(a) PSD Act. Having taken the item in trade or pawn during the course of the licensee's business, the licensee continues to retain the item during the course of the licensee's business during the 14-day holding period. It is erroneous in a fundamental respect to confine the words "during the course of the licensee's business" to a period when the licensee is lawfully able to sell the item or display it for sale. The learned Magistrate fell into such error which was compounded by reading the words "ordinary" or "normal" into the phrase "course of the licensee's business". This construction is contrary to both the ordinary meaning of the words used in clause 18A(1) and the purpose of the clause lying within its broader legislative scheme.

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Does the Plaintiff's Appeal Involve a Question of Law Alone ? 76 I return to consider whether the appeal involves a question of law alone. There was no factual dispute in this case. Although the learned Magistrate did not make findings of fact in the course of his reasons for dismissing the charges, the facts emerging from both the prosecution and defence cases in the Local Court were clear and uncontested. The Defendant had taken each of the five items in trade or pawn in the course of the licensee's business. A label had been prepared for each item which contained a contract number. Four of the five items were placed in that part of the Defendant's business premises nominated as the 14-day holding area. The labels were placed in that area as well, but were not attached to the items. The Gemini mountain bicycle was held by the Defendant elsewhere in its business premises. The Defendant had taken the items in this way and retained them for at least six days and up to 11 days without affixing the labels to the items. It was a deliberate decision by the Defendant not to affix physically the label to each item. 77 A fair reading of the learned Magistrate's reasons supports a conclusion that his Honour approached the construction and application of clause 18A in the manner submitted by the Plaintiff. 78 In my view, this approach involved a fundamental misunderstanding of the meaning of words contained in clause 18A PSD Regulations. In effect, his Honour posed for himself the wrong statutory question for determination. There has been a misdirection as to law: Australian Gas Light Co v Valuer General (1940) SR 126 at 138; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156; Director of Public Prosecutions v Belani [2005] NSWSC 1013 at paragraph 27. I am satisfied that the appeal is based upon a ground that involves a question of law alone. 79 I am satisfied that the Plaintiff has demonstrated that the learned Magistrate erred in law in his construction of clause 18A PSD Regulations. I am satisfied also that the learned Magistrate erred in law in dismissing each of the five charges upon the basis of the erroneous construction of the provision. 80 The arguments raised in the Defendant's Notice of Contention may be disposed of shortly. I am not satisfied that the arguments advanced by the Defendant, or any of them, reflects the true construction and operation of clause 18A. I have concluded that the provision requires the tag or label to be attached physically to the item. I reject the Defendant's submission to the effect that some act less than physical attachment satisfies the obligation under the clause. 81 I do not accept the Defendant's submission that the requirement under s.21 PSD Act not to alter an item can, in some way, provide a lawful basis upon which the Defendant can refrain from complying with the mandatory provision in clause 18A(1). I accept the Plaintiff's submission that, by selecting the use of stickers only, the Defendant cannot avoid compliance with the obligation under the clause. Other methods of affixing a tag or label to an item are available, in any event, which would not have the difficulty asserted by the Defendant. The affixing of a tag or label by use of string or adhesive tape would appear to satisfy the requirements of the clause. 82 I accept the Plaintiff's submission that compliance by the Defendant with other obligations under the PSD Act and Regulations by way of record keeping does not, in some way, absolve the Defendant from compliance with the mandatory provisions in clause 18A. 83 In summary, I conclude that:

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Cases Cited (24)