Edward Lees Imports Pty Ltd v Commissioner for Fair Trading - [2018] NSWCATOD 116 - NSWCATOD 2017 case summary — Zoe

NSWNSWCATOD

Edward Lees Imports Pty Ltd v Commissioner for Fair Trading

[2018] NSWCATOD 116

NCAT Occupational|2017-06-06

View original source

At a glance

Source facts

Court

NCAT Occupational

Decision date

2017-06-06

Catchwords

(1990) 170 CLR 321 Briginshaw v Briginshaw [1938] HCA 34
(1992) 175 CLR 408 Drake v Minister for Immigration and Ethnic Affairs [1997] AATA 179
(1993) 30 ALD 280, at 290 Re Pochi and Minister for Immigration and Ethnic Affairs [1979] AATA 64
(1979) 36 FLR 482 Sabag v ACCC (2001) NSWSC 411 Smith v NSW Bar Association [1992] HCA 36

Source

Original judgment source is linked above.

Catchwords

(1990) 170 CLR 321 Briginshaw v Briginshaw [1938] HCA 34(1992) 175 CLR 408 Drake v Minister for Immigration and Ethnic Affairs [1997] AATA 179(1993) 30 ALD 280, at 290 Re Pochi and Minister for Immigration and Ethnic Affairs [1979] AATA 64(1979) 36 FLR 482 Sabag v ACCC (2001) NSWSC 411 Smith v NSW Bar Association [1992] HCA 36(1992) 176 CLR 256 Smith v The Queen [2001] HCA 50(2001) 206 CLR 650 Sudath v HCCC [2012] NSWCA 171SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63

Judgment (51 paragraphs)

[1]

1979] AATA 64; (1979) 36 FLR 482 Sabag v ACCC (2001) NSWSC 411 Smith v NSW Bar Association [1992] HCA 36; (1992) 176 CLR 256 Smith v The Queen [2001] HCA 50; (2001) 206 CLR 650 Sudath v HCCC [2012] NSWCA 171; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 Tosohn v Director General Department of Fair Trading [2003] NSWADT 1 Trlin v Commissioner of Fair Trading [2003] NSWADT 222 Category: Principal judgment Parties: Edward Lees Imports Pty Ltd (Applicant) Commissioner for Fair Trading (Respondent) Representation: Counsel: JR Young (Applicant) N Case (Respondent)

[3]

Background

The Applicant applied to the Respondent for a motor dealer's licence under the Motor Dealers and Repairers Act 2013 (the MDR Act) on 26 November 2014. Licence number MD054381 was granted to the applicant on 11 June 2015, with an expiry date of 10 June 2016.
On 16 February 2016 the Respondent and others attended the Applicant's car yard, issued a Notice to Show Cause (the First Show Cause) and seized documents On 20 September 2016 the Respondent issued a Notice of Determination (the First Determination) to take disciplinary action adverse to the Applicant.
On 6 October 2016, the Applicant applied to the Tribunal for review and stay of the First Determination. Interlocutory hearings took place on 12 October, 6 and 20 December 2016. On 12 October, the Tribunal granted a conditional stay of the First Determination. On 6 December 2016, the Tribunal remitted the matter under s 65 of the Administrative Decisions Review Act 1997 (the ADR Act) to the Respondent, to make a new determination. The reasons for that remit were published in Edward Lee's Imports Pty Ltd v Commissioner for Fair Trading [2017] NSWCATOD 13 on 23 January 2017. On 20 December 2016, the Tribunal granted the Applicant's stay application until further order of the Tribunal, and awarded the Applicant costs on the basis of a finding of special circumstances as a result of the Respondent's conduct. The reasons for the orders of 20 December 2016 were published in Edward Lee's Imports Pty Ltd v Commissioner for Fair Trading [2016] NSWCATOD 165.
On 6 January 2017, the Respondent issued a Notice to Show Cause (the Second Show Cause) and Notice of Suspension of Licence MD054381 pending determination of disciplinary action. On 20 January 2017 the Applicant applied to the Tribunal for a stay of the respondent's decision of 6 January 2017 to suspend the Applicant's licence. On 25 January 2017 the stay was granted until further order of the Tribunal, and the matter was listed for hearing on 27 and 28 April 2017.
On 28 February 2017, the Tribunal made directions for the filing and service of evidence and submissions According to those directions, the Applicant was due to file its grounds for review, evidence and submissions by 4 April 2017. That did not occur. On 14 March 2017 the Respondent issued a Notice of Determination (the Second Determination) to take disciplinary action pursuant to s 45 of the MDR Act against the Applicant, cancelling Licence MD054381 pursuant to s 45(1)(g) of the MDR Act and disqualifying the Applicant from being a licence holder or from being involved in the direction, management or conduct of a business for which a licence was required under the MDR Act for a period of ten years pursuant to s 45(1)(f) of the MDR Act.
At a further directions hearing on 11 April 2017, the April 2017 hearing was vacated and relisted for 16 and 17 May 2017, and the Tribunal made orders for the filing of grounds of review, evidence and submissions from the Applicant by 13 April 2017, and replies from the respondent by 11 May 2017. At some point between 13 and 21 April, the Applicant served the Respondent with its grounds for review, some evidence and submissions
On 27 April 2017 the parties sought vacation of the May 2017 hearing dates to allow for the filing and service of evidence and submissions in reply. On 1 May 2017 the Tribunal vacated the May 2017 hearing dates and relisted the matter for hearing on 5 and 6 June 2017.
A further vacation of the hearing date was requested, which was refused by the Tribunal on 17 May 2017. At a directions hearing on 23 May 2017, orders were made for the filing and service of further documents and objections to evidence. The Tribunal noted on that occasion that "it is unlikely that the matter will be finalised on the days that it is currently listed. A further timetable will be set at the conclusion of that part of the hearing".
The hearing commenced on 5 June 2017, despite the Respondent's repeated failure to comply with orders for the filing of its evidence in reply. The hearing resumed on 19 July 2017 and continued on 20, 21, 24, 26, 28 July 2017. The transcript involved over 700 pages, and the filed material comprised approximately 12 folders of material, including 5 folders filed by the Respondent for the purpose of s 58 of the ADR Act (the Section 58 documents).
The reviewable decision before the Tribunal, pursuant to s 176(1)(c) of the MDR Act, is the Second Determination dated 14 March 2017. The Application for Review addressing the Applicant's grounds for review of the Second Determination was not, it seems, filed with the Tribunal as a new or amended application in these proceedings, but was served on the Respondent sometime between 13 April 2017 and 21 April 2017, and included in material filed by the Applicant with the Tribunal on 10 May 2017. The stated grounds for review were: 1) The decision was not made in accordance with law; 2) The decision was affected by errors of law; 3) The decision was affected by actual bias o[r] by a reasonable apprehension of bias; 4) The decision was not made in accordance with the Notice to Show Cause o[r] in accordance with the requirements of Part 3 of the Motor Dealers and Repairers Act 2013; 5) The decision was based upon unreliable material and took into account irrelevant considerations; 6) The decision was based upon the asking of wrong questions and the failure to ask correct questions; 7) The decision ignored relevant material and failed to take into account relevant considerations; 8) The decision is against the evidence and the weight of evidence; 9) The decision is lacking in any intellectual cohesion and is not based upon any active intellectual process; 10) The decision to cancel and to disqualify was unduly harsh; 11) The decision was unreasonable, irrational and capricious; 12) The decision was not based on any proper sense of proportion; 13) The decision was based upon a denial of procedural fairness; 14) The decision was an improper and unreasonable exercise of power; 15) The decision was not based on any proper sense of proportion.
I accepted the expressed grounds of review as an amendment to the Applicant's Application for Review, in circumstances where both parties, and the Tribunal in case management, proceeded on that basis
Eleven witnesses gave oral evidence and were cross examined during the course of the hearing, which took place over 9 days on 5 to 6 June, 19, 20, 21, 24, 26, 28 July and 2 August 2017: Ahmad Awad, Mohammed Khan, Steven Clark, Ben White, Damon Jackson, Ismail Eyvaz, Elee Georges, Philip Lee, Daryl McIntyre, Michael Jeal, and Sonia Vongpraseuth. I address the evidence before the Tribunal below in more detail.

[5]

MDR Act

The objects of the MDR Act are, relevantly to this application, consumer protection, the establishment and enforcement of standards of conduct and transparency and the prevention of misleading or dishonest conduct in relation to motor dealers, motor vehicle repairers and motor vehicle recyclers (s 3(a) - (c)).
The Second Reading speech relevantly outlines the reasons for introducing various aspects of the MDR Act licensing regime relied on in these proceedings, being "Fair Trading's ability to enforce the law against dodgy people in the motor industry", specifically focussing on issues of odometer tampering, "phoenixing" used to avoid regulatory sanctions by Fair Trading, and "close associates" "getting another licence and reoffending or ripping off consumers all over again".
A motor dealer is a person who "carries on the business of dealing in motor vehicles" (s 5) including "by" an employee, agent or other person (s 7).
The licensing provisions are set out in Part 2 of the MDR Act. Under section 11 of the MDR Act it is an offence to carry on the business of a motor dealer without a licence. A licence, therefore, privileges its holder from prosecution for activity that would otherwise be unlawful. A licence must specify the place at which the business is conducted (s 28).
Section 25 of the Act prohibits the grant of a licence to: 1. a person who is not "fit and proper" (s 25(2)(b)); 2. an applicant who is not likely to carry on the business for which the licence is sought honestly or fairly (s 25(4)(a); 3. a corporation if a: 1. director; 2. person involved in its management, or 3. any other person having control of the company would be prohibited from obtaining a licence (s 25(3)(a)).
Section 25 of the Act also gives the Commissioner a discretion to refuse to grant a licence to an applicant: 1. whose "close associate" is not a fit and proper person (s 25(5)(a)), or 2. if there is another licence in force in relation to the whole or part of a "place of business" to which the application relates (s 25(5)(b)).
Section 27 of the Act sets out some considerations relevant to but not limiting the considerations that may make a person "not fit and proper". What constitutes "fitness" in the context of determining whether a person is a fit and proper person general law "fitness" is derived from context (Australian Broadcasting Tribunal v Bond and Ors [1990] HCA 33; (1990) 170 CLR 321 at [380] per Toohey and Gaudron JJ). If the question is the fitness of a company, then the fitness of those controlling it may be imputed to the corporation (ABT v Bond).
A "close associate" is defined in s 8 of the Act as person having a relevant financial interest, power or position in relation to the applicant or licence holder
The disciplinary provisions of the Act are set out in Part 3, ss 38 to 47. General grounds for taking disciplinary action relevantly include: 1. the Commissioner has "reasonable grounds to believe that a licence holder has or is likely to contravene" a provision of the Act (s 38(1)(a)); 2. the licence holder is not a fit and proper person (s 38(1)(c)); 3. the Commissioner would, if the licence holder were not already licenced, be required to refuse an application by the licence holder (s 38(1)(d)).
Section 39 of the Act sets out grounds for taking disciplinary action that are specific to motor dealers They include, relevantly to the present application, the business endorsed by the licence has been conducted in a dishonest or unfair manner (s 39(b).
Section 45 sets out the actions which may be taken when disciplinary grounds are made out. They range from a reprimand through requirements to take certain action in the conduct of a business, suspensions, the imposition of conditions, contributions to the compensation fund, disqualification from holding a licence and cancellation of licences.
Under s 41(5) of the MDR Act the Secretary must not take disciplinary action against a person unless the person has been given a show cause Notice and the Secretary has considered any submission made to the show cause notice.
The MDR Act requires the cancellation of a licence if a licence holder is found not to be a fit and proper person (s 46(b)).

[7]

Onus and standard of proof

In merits review cases such as these proceedings there is no onus of proof as that term is generally understood: Nakad v Commissioner of Police, New South Wales Police Force [2014] NSWCATAP 10 at [28] - [30], [34]; Bushell v Repatriation Commission [1992] HCA 47; (1992) 175 CLR 408 at 424-425; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; (2006) 228 CLR 152 at [40]. The Tribunal must decide what the correct and preferable decision is having regard to any relevant factual material: ADR Act, s 63(1).
It was previously thought that the applicable standard of proof was that laid down in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. The Supreme Court has recently said in Bronze Wing Ammunition v Safe Work New South Wales (No. 2) [2016] NSWSC 988, however, that this is not the case (at [77]): "As a matter of logic, if there was no onus of proof cast upon either party, there can have been no standard of proof. If there was no standard of proof, including the civil standard of proof on the balance of possibilities, the principle in Briginshaw (it being a refinement of that standard) had no application to the proceedings before the single member
As held in the appeal to that decision, Bronze Wing International Pty Ltd v SafeWork NSW [2017] NSWCA 41 at [127], his Honour's findings: …reflect the strictly correct proposition that neither Briginshaw nor s 140 of the Evidence Act applies directly in decision-making by NCAT where the rules of evidence do not apply. They should not be regarded as standing against the proposition that what was said in Briginshaw and Neat Holdings reflects a more general approach to fact finding, which is applicable by analogy to NCAT.
As discussed in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170 at 171: "[T]he strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove.…
When reviewing a decision of an administrator, the Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: Civil and Administrative Tribunal Act 2013 (the CAT Act), s 38(2). Although not bound by the rules of evidence, the Tribunal must base its decision on 'probative evidence': Re Pochi and Minister for Immigration and Ethnic Affairs [1979] AATA 64; (1979) 36 FLR 482 at 491-493.
It is well established that in considering an application for review, the Tribunal is not restricted to a consideration of the material that was before the respondent, but may have regard to any relevant material before it at the time of the review: Drake v Minister for Immigration and Ethnic Affairs [1997] AATA 179; (1979) 46 FLR 409.

[8]

Scope of Tribunal's review

The Second Show Cause Notice was issued by the Respondent on 6 January 2017 and forms the basis for the findings made in the Second Determination. Following the principles identified in Tosohn v Director General Department of Fair Trading [2003] NSWADT 1 (Tosohn) at [57] to [59], the Tribunal limits its review to those grounds identified in the Second Show Cause. The Second Show Cause alleged: 1. Contravention by the Applicant of s 38(1)(a) of the MDR Act, including: 1. Advertising vehicles as having odometer readings that were inaccurate and which the Applicant knew or reasonably suspected were inaccurate (Motor Dealers and Repairers Regulations 2014 (the MDR Regs), r 42); 2. Odometer tampering (s 52); 3. Failure to report suspected odometer tampering (s 54); 4. Failure to keep records (s 100 of the MDR Act and Sch 2 of the MDR Regs). 1. Carrying out the business of a motor dealer in a dishonest and unfair manner (s 39(b)) by: 1. Knowingly, reasonably suspecting or recklessly providing vehicles for sale with inaccurate odometer readings; 2. Obtaining records that inaccurately recorded vehicles' odometer readings; 3. Being the "phoenix" company of Edward Lee's Japanese Auto Centre Pty Ltd (ELJAC) for the purpose of it avoiding statutory obligations; 1. Not being a fit and proper person to hold a licence under the MDR Act (s 38(1)(c)) due to: 1. Serious nature of breaches of s 52 and s 54; 2. Serious and systematic nature of breaches of s 100 of the MDR Act and Sch 2 of the MDR Regs; 3. Application for a licence required to be refused because of: 1. Close associates not being fit and proper persons for the purpose of s 25(5)(a) due to their serious and systemic breaches of the MDR Act: 2. ELJAC; 3. Golee Pty Ltd (Golee); 4. Terrano Craft Pty Ltd (Terrano); 5. Edward Lee; 6. Philip Lee. 7. Being unlikely to carry on the business authorised by the MDR Act licence honestly or fairly (s25(4)(a)).
The Respondent's closing submissions articulated extensive findings it sought from the Tribunal: 1. the Applicant, contrary to s 38(1)(a) of the MDR Act: 1. altered the odometers of vehicles 1, 2, 3, 8, 10, 11, 13, 16, 17, 24, 26, 27, 30, 31, 32, 33, 34, 36 and 37, in contravention of s 52(1)(a) of the MDR Act; 2. advertised vehicles 4 and 26 as having odometer readings that were false and which it knew or reasonably suspected were false, in contravention of r 42 of the MDR Regs; 3. failed to keep records in contravention of s 100 of the MDR Act and Schedule 2 of the MDR Regs. 1. ELJAC, contrary to s 38(1)(a) of the MDR Act: 1. altered the odometers of vehicles 1, 2, 3, 8, 10, 11, 13, 16, 17, 24, 26, 27, 30, 31, 32, 33, 34, 36 and 37 in contravention of s 52(1)(a) of the MDR Act; 2. advertised vehicles 7, 8, 10, 11, 13, 14, 16, 17, 18, 19, 25, 28, 29 and 35 as having odometer readings that were inaccurate and which it knew or reasonably suspected were inaccurate in contravention of r 42 of the MDR Regs; 3. failed to keep records in in contravention of s 100 of the MDR Act and Schedule 2 of the MDR Regs; 1. Golee and Terrano, contrary to s 38(1)(a) of the MDR Act altered the odometers of vehicles 1, 2, 3, 8, 10, 11, 13, 16, 17, 24, 26, 27, 30, 31, 32, 33, 34, 36 and 37 in contravention of s 52(1)(a) of the MDR Act; 2. ELJAC is not a "fit and proper person" for the purposes of s 25(5)(a) of the MDR Act because of its serious and systematic contravention of the MDR Act (ss 52, 100, r 42); 3. Golee and Terrano are not "fit and proper persons" for the purposes of s 25(5)(a) of the MDR Act because of their serious and systematic contravention of the MDR Act (s 54); 4. Philip Lee is not a "fit and proper person" for the purposes of s 25(5)(a) of the MDR Act because he has been convicted of dishonesty offences (s 27(1)(a)) and has misled the Respondent and the Tribunal; 5. The Applicant is not a fit and proper person to hold a licence under the MDR Act (s 38(1)(c)) because of: 1. the serious nature of its contravention of s 52; 2. the serious and systematic nature of its contravention of s 100 and Schedule 2; 1. If the Applicant were not a licence holder, its application for a licence would be required to be refused because: 1. ELJAC, Golee, Terrano and Philip Lee are "close associates" of the Applicant who are themselves not fit and proper persons for the purposes of s 25(5)(a) of the MDR Act because of their serious and systematic contravention of the MDR Act and conviction for dishonesty offences and/or 2. The Applicant is unlikely to carry on the business authorised by a motor dealers' licence honestly or fairly because it has systematically engaged in conduct that is dishonest and unfair including but not limited to its contraventions of the MDR Act (s 25(4(a)). 1. The Applicant is not a fit and proper person for one or more of the grounds set out above and that the Tribunal is therefore required to cancel the Applicant's licence under s 46(b) of the MDR Act. 2. The serious and systematic nature of the contraventions of the MDR Act by the Applicant and its close associates justifies, in the public interest, the suspension of the Applicant's licence and disqualification of the Applicant from holding a licence for the maximum period of 10 years
The issues for determination in these proceedings are limited to those grounds relied on in the Second Show Cause. However, the Tribunal is entitled to consider all of the evidence before it for the purpose of determining those issues, to reach the correct and preferable decision.
The Applicant submitted that the alteration of odometers by Golee and Terrano were not allegations addressed by the Second Show Cause. I accept that those allegations were not particularised in the Second Show Cause, however the alteration of odometers by Golee and Terrano can be considered by the Tribunal in the context of their fitness and propriety, to the extent that their fitness and propriety is relevant.
I accept the Applicant's submission that the articulation and particularisation by the respondent of the evidence supporting the allegations against the Applicant and its "close associates" has shifted over the course of the proceedings. This would give rise to procedural unfairness in circumstances where the Applicant was not provided with adequate opportunity to respond. However, the Applicant has been given ample opportunity to respond to the evidence, both prior to the hearing, during the course of the hearing, and in written submissions following the hearing.

[10]

Ahmad Awad

Mr Awad was the Respondent's investigating officer of the Applicant and various of Phillip Lee's companies from 2013 until Mr Eyvaz took over that investigation in January/February 2016. Mr Awad swore the affidavits to obtain the search warrant, which were not included in the evidence before the Tribunal, and referred to a joint operation with NSW Police including notes in a TRIM database, of which evidence was also not provided to the Tribunal.
Mr Awad gave evidence via affidavit of his understanding of how vehicles were imported from Japan and the role of JEVIC which, in cross examination, he accepted was incorrect and not within his own knowledge. His information and purported understanding about the technical aspects of odometer tampering and the import/export of motor vehicles was obtained from "a number of people from Motor Vehicle Services Unit", only one of whom he could name, and from broad inquiries with the Department of Agriculture. The evidence of those conversations was not provided to the Tribunal. I place no reliance on this evidence as a result.
According to his affidavits, for the purpose of supporting the allegations against the Applicant, Mr Awad compiled documents from a number of sources Those documents were relied on by the decision maker and ultimately formed part of the section 58 material before the Tribunal. The reliability and veracity of those documents and their sources is questionable. Prior to the issue and execution of the search warrant, Mr Awad "saw information provided by a confidential informant", but there was no evidence of or from that informant before the Tribunal. Then, Mr Awad sought to "verify" the information provided by the confidential informant by conducting his own searches for the information and obtaining the "types of documents", which he "collated from various websites on the internet", including by googling a specific vehicle's VIN number The dates on which he conducted these internet searches and took screenshots are derived entirely from the 3 page table he annexed to his affidavit of 7 June 2017. In that affidavit he stated the table was compiled on 20 September 2016 and provided to the other investigators then. In cross examination he stated that the table was compiled prior to the search warrant, and then later contradicted that statement. In cross examination he stated that the dates and actual screenshots of the pages he sourced from the internet were "in the brief", but these were not provided to the Tribunal.
On examination of the documents in the section 58 material which, according to Mr Awad, are "very similar" to the screenshots he took, there is no independent verification of the date or time on which they were accessed or screenshotted, or their source URL. There was no specific evidence provided by Mr Awad of how he recalled the dates and sources of screenshots supposedly taken up to three years prior to the compilation of the table by him on 20 September 2016, where the documents did not provide this information, other than it was "in the brief". In the circumstances, I reject Mr Awad's evidence of the dates on which he claims the internet-sourced documents were accessed and screenshots taken by him, and his evidence of their source. My reliance on the documents themselves will be dealt with below.
Mr Awad presented truthfully as a witness at hearing but his oral evidence significantly diminished and contradicted his written evidence, and was unimpressive. Whilst his affidavit evidence contained robust statements about industry practice, processes and legalities involved in the importation of vehicles from Japan, as stated by him in cross examination: …it was an investigative process It was an ongoing thing. I was continuously learning. This whole thing was foreign to me, this whole matter was foreign to me, and it was a very complex matter so I had to understand and I accepted, you know, that may be a few parts that I have learnt since then.
He accepted in cross examination that he had no expertise in the area of odometer tampering, the requirements or expectations of the Department of Agriculture or the processes involved in importing second hand vehicles from Japan. He claimed to have kept records and made inquiries during the course of his investigation but could only talk about the subject matter and the investigation itself in broad terms.
Audio evidence was tendered (which I will address in detail below) of a conversation between Mr Awad, Mr Eyvaz and Phillip Lee on 4 August 2016 which further diminished the Tribunal's impression of Mr Awad's credibility in relation to his written evidence.
In his written evidence, Mr Awad stated that the conversation on 4 August 2016 was brief and went for about 5 minutes, that it concerned Mr Lee's business operations of Sun Rise Cars, the new business premises, the new Rising Sun Cars licence, and the "licence in general", that Mr Lee suggested that he had "information to make this all go away" and offered to provide it, and that Mr Awad's response was that he should "seek legal advice to ensure it was in your best interest to do so".
In reality, as discussed below, the conversation was a lengthy and sometimes heated exchange, canvassing a number of different topics involving the investigation and allegations by the Respondent against the Applicant, Mr Lee, and various business entities; involved implied threats by Mr Awad and Mr Eyvaz, and was far from the short, benign exchange that Mr Awad's written evidence implied. The audio recording included the following exchange: Mr Awad: So what I'm trying to tell you is, I will be frank with you, we know its happening here. And we know you are doing it. And we know that it has been done in this workshop. And we know that you are aware of it. So. … Mr Lee: That's a pretty serious accusation. Based on what evidence? Mr Awad: Mate we have given you paperwork on all the evidence and you will get it but all I am saying is that … Mr Lee: What I am asking you is, you're saying that I import cars from Japan and then wind back the odometers here in Australia. Is that what you are saying? Mr Awad: And that's what the paperwork said a number of times, what the warrant said, that's what the show cause said, that's what all the paperwork, all the correspondence we have been collating. Mr Lee: We haven't done that.
The conversation went for over 35 minutes, and while it did include discussion regarding documents Mr Lee claimed would exonerate him in relation to the odometer readings discrepancies, Mr Awad's response was not as described in his affidavit. The conversation was recorded as follows: Mr Awad: …I don't know I just think it's a little too convenient to say "I wasn't aware of what is going on with the cars because we bought them from Japan, I don't know what's going on in Japan". Mr Lee: You know, we are aware that there is all sorts of problems in Japan and I don't think I should be responsible for that. … Mr Awad: As soon as the car hits here in Australia, that is what we are looking at. We don't care, in Japan, as long as the car… Mr Lee: Why don't you check all the records of when the cars hit the wharves because they record the mileage, and that will tell you the answer to the story and you obviously haven't done that yet. Mr Eyvaz: You don't know that, and I'm not going to confirm or deny that because you haven't got clearance for me to tell you that. Mr Lee: If you are having trouble getting information I will give it to you. Mr Awad: OK then give it to me. I'll give you my business card. How do you want to give it to me? By email? … Mr Lee: I think that information is available and I think that I can give that information. Mr Awad: Well you know, if that is the case can I ask you why, why that hasn't happened, why haven't you been forthcoming with that from the beginning? Mr Lee: Because my lawyer likes to drag things out, and he makes a lot of money out of me. I can't be more frank than that. Mr Awad: Yeah I know but Mr Lee: Between you guys, and my lawyer… Mr Awad: Why don't you tell your lawyer just to shove it? …
As a result of the discrepancies between Mr Awad's oral evidence, the audio recording, and his written evidence, the Tribunal considers that his written evidence is unreliable and therefore places no weight on it.

[11]

Ismail Eyvaz

Mr Eyvaz's evidence, which included his responsibility for the conduct of the investigation and search warrant commencing in the weeks prior to the search warrant occurring on 16 February 2016, was of limited assistance. He had no knowledge and did not check whether or to what extent the Respondent had documents supporting the First Show Cause, or the issuing of the search warrant, and relied wholly on a table provided by Mr Awad regarding the source and date of documents said to have been obtained from google or unspecified Russian online sources
He stated under cross examination that he would "bounce information" off Mr Awad, that they worked together, and that Mr Awad continued his involvement in the investigation after handing over to Mr Eyvaz, which I accept is likely on the evidence, but does not assist the Respondent in convincing the Tribunal of the reliability of his own evidence. He agreed under cross examination that ELJAC had not "phoenixed", and that his definition of "phoenix" activity was different to the commonly accepted definition: Well, the definition I put on phoenix was different. I just saw it as because he was being taken to NCAT on a number of occasions and then he moved all of his assets, he closed one licence and opened up another one, moved all the assets over to his new company. That's the definition I put on it but.
Included in Mr Eyvaz's written evidence was a table, "Annexure J" to his affidavit of 7 June 2017, expressing the Respondent's submissions regarding the source of the documents contained in Volumes 2 to 5 of the section 58 documents Between 5 June 2017 and 19 June 2017 the Tribunal was provided with multiple versions of Annexure J, and ultimately the "completed" version was tendered as exhibit R4. On the basis of his evidence at hearing regarding his reliance on Mr Awad's information, and his conduct during the execution of the search warrant, I place minimal weight on Mr Eyvaz's oral and written evidence, including regarding the source, veracity and reliability of the documents contained in Volumes 2 to 5 of the section 58 documents I also place minimal weight on the opinions expressed by him regarding the allegations against the Applicant. He had no or limited experience prior to being made case officer in this investigation, of any issues regarding motor dealerships or the processes and legalities involved in the importation of motor vehicles, having joined the Department of Fair Trading just two months prior His oral evidence demonstrated that he neither knew, nor cared to check whether and to what extent the allegations against the Applicant were supported by evidence, and relied entirely on the opinions of others, despite being the warrant holder for the search conducted at the Applicant's premises in February 2016, and the case officer for the investigation from around that date.

[13]

Philip Lee

The Respondent submitted that Mr Lee was dishonest, had previously lied to authorities to avoid consequences, fabricated evidence as a first resort in responding to allegations of any contravention of the law, and engaged in this conduct in order to avoid responsibility for his unlawful conduct. Support for those submissions was founded in previous proceedings, including Adams v Japanese Auto Centre Pty Ltd (Motor Vehicle) [2009] NSWCTTT 47, and a prosecution in 2015 for offences under clause 48 of the Road Transport (Vehicle Registration) Regulation 2007, including concealment of those offences. The Respondent submitted that Mr Lee's evidence should therefore not be accepted by the Tribunal unless it was corroborated by reliable independent evidence.
They are relevant to the Tribunal's determination of Mr Lee's credibility as a witness and the reliability and weight placed on his evidence in these proceedings. In evidence, Mr Lee claimed the charges and convictions were unfair and a product of the Respondent's investigation. He attempted to contradict statements in the Statement of Facts which supported the charges and convictions, and deflected responsibility to others. He also attempted to deflect responsibility for the multiple false statements contained in the disclosures section of the application for a Motor Vehicle Repairers Licence lodged on 2 September 2015. He deflected responsibility to Sonia Vongpraseuth for making false statements or records in both the criminal proceedings and in completing the licence application disclosures, but agreed that the obligations to makes those statements and records were ultimately his. I accept the Respondent's submission that the offences with which Mr Lee was previously convicted were offences involving dishonesty, and find that when faced with allegations of wrongdoing, he commonly deflected responsibility for his actions.
In relation to Mr Lee's oral evidence at hearing, the Respondent submitted extensively on the contradictions and inconsistencies in his evidence: 89. Mr Lee's evidence in cross-examination was frequently contradictory. For example, on 26 July 2017 he said at first that he only obtained odometer readings from Japanese suppliers by telephone (T: 26.7.17: 57, 58). Later, he said that he obtained odometer readings by email, but that those emails had been destroyed with the server/GILQ (T: 26.7.17: 73 - 75 and 80). Still later on that day, Mr Lee said that he first recorded the odometer readings of vehicles upon delivery to the yard (T: 26: 26.7.17: 78).
The transcript references, however, do not support the Respondent's submission. Mr Lee did not state that he "only" obtained odometer readings from Japanese suppliers by telephone. In cross examination, the following exchange occurred between Mr Lee and counsel for the Respondent: Q. Yes; you say it all occurred in telephone conversations? A. What occurred? Q. Well, that you obtained the odometer readings from the suppliers by telephone only? A. I didn't say that, Ms Case. Q. Well, how else did you receive it? A. It could have been in emails as well. Q. You didn't provide any emails setting out the odometer reading prior to purchase, did you? A. I didn't provide any telephone recordings of my conversations I didn't provide any emails But you've got all my hard drives, apart from the destroyed one.
I reject the Respondent's submissions that Mr Lee's evidence in cross examination was contradictory and inconsistent, and his answers were frequently non-responsive, argumentative, self-serving and dilatory. Whilst Mr Lee's answers were occasionally non-responsive, argumentative, self-serving or dilatory, this was not a frequent occurrence and did not happen more than would be expected in a detailed, lengthy and broad ranging cross examination on issues concerning his personal integrity and financial interests. When a suggested inconsistency in his evidence was put to him, Mr Lee gave explanations or clarifications to resolve any inconsistency.
It was also not the case, as submitted by the Respondent, that "In cross-examination, Mr Lee failed to agree even with propositions favourable to his cause (T28.7.17 [123])". At page 123 of the transcript from 28 July 2017, Mr Lee does agree with the proposition put to him by the Respondent's counsel: Q. And yet you have in all of your statements to this Tribunal and in the conduct of this application insisted that the respondent's conduct has caused damage to your business, haven't you? A. I think the respondent's conduct has been abysmal and it has caused millions of dollars of damage, yes Q. Yes, but can you - A. Yes, the answers yes Q. I have given you a free kick, Mr Lee -- A. Simple answer yes Sorry, yes, I say yes
In oral evidence and cross examination, Mr Lee presented as a believable but defensive witness, who was frustrated and stressed by the relentless investigation and allegations against him and his business, the legal processes, and the effects this had on his livelihood. Having considered the parties' submission on Mr Lee's credibility as a witness, I rely on Mr Lee's oral evidence in these proceedings in relation to his usual practices, knowledge and intentions in complying with his obligations under the MDR Act and Regulations. Significantly, his oral evidence included a thorough explanation of his process in complying with his obligations pursuant to the MDR Act, which I accept, and which he expressed as follows: In my understanding, yes, I am the licensed dealer and it's my company and I like to think I act in a responsible way. But I did delegate a lot of tasks to other staff members, so particularly Sonia and her predecessor Carol, and even the part-time bookkeeper, and even occasionally the salespeople I would say to them, particularly when car would arrive from Japan, it was my company policy - which would have been put in place not all the time but a lot of the time - to record the odometer readings of the cars when first arrived in our premises on the back of a truck, dirty and dusty and sometimes with a few scratches, and we would have a process called booking the cars into stock. And that process involved usually the salespeople and Sonia or one or the other or a combination of the two to go and grab some key tags, match the stock number with the chassis number that's already been allocated in EasyCars, record the odometer reading as they see the car when it arrives And that would happen most of the time. But, you know, being a normal small business we are not perfect. So I can think of some examples where that probably didn't happen for various reasons But the general rule was as soon as a car arrives in our premises, 'book it into stock' is the terminology we would use and that would involve putting a stock number on the window, creating a key tag with the stock number, recording the mileage usually on the back of a cardboard key tag that came with all the cars - most of the cars from Japan. Then they would take those keys into the office. It might be a salesperson that would take those keys into the office, give it to Sonia or Carol or Ying and they would update the police book by putting the mileage recorded when the car first arrived at the premises And there would be exceptions to that. For example, sometimes if we had a lot of cars and we were overflowing, we couldn't fit them on the premises, we might shoot a car off to a detailer or off to a panel beater or various subcontractors where things needed to be fixed on the car So occasionally we wouldn't record the odometer reading absolutely straightaway. But, as a general rule, I would say in 80 or 90 per cent of the times the odometer reading would be recorded straightaway by Sonia or a salesperson. Even occasionally I would go and help, because we're a small business and I wouldn't mind rolling up my sleeves and assisting, and we would update the police book Form 4. And quite often there would be discrepancies from the reading I was given usually by phone from the supplier Sometimes I would make a human error I would make a mistake. For example, the guy on the other end of the phone in Japan said it's got 35,000 and I might have written 45,000, because I haven't seen the car and I might have advertised it that way. But as soon as the car turned up on our premises we would make it more accurate. And, as you said earlier, there was probably some rounding up of numbers or some rounding down of numbers But when the car arrived at the premises as a business process we would record the odometer readings on the cars very, very quickly, within a day or sometimes within minutes or hours of the cars arriving on a truck. And I believe in the testimony of the truck driver Zoran from Trilogy Towing, he would support that statement because he would see us start to book the cars in, not all the time but quite often, when he would drop the cars Any member of my staff, if Fair Trading had bothered to interview them, which not a single one has been interviewed, would support that process And you could go back 15 or 20 years and interview old staff members, that's always been the process for the last 15 or 20 years: book the cars in, record the mileage, update the police book. … I would say that it's a small company and we all have a role in adding and subtracting entries to the Form 1. … I would check that from time to time, yes I like to make sure those things are accurate. But, like any small business, sometimes there's mistakes; sometimes there's errors and we do our best to do a good job. But we are not perfect.
Mr Lee's oral evidence of his processes included concessions that there were exceptions to consistent compliance with that process, that he delegated tasks to staff members which were his responsibility, and that there were errors and discrepancies with recording odometer readings, which were caused by him. In cross examination Mr Lee accepted he was responsible for the accuracy of the forms which he claimed Ms Vongpraseuth had filled out for him, and that similarly he had instructed Ms Vongpraseuth to make entries in the statutory records on his behalf, when they were his responsibility to maintain. I accept that evidence and find that it demonstrates Mr Lee's knowledge of his personal obligations under the MDR Act as the director and manager of the licence holder, but a practice of deferring responsibility for the execution of those obligations to others.

[14]

Sonia Vongpraseuth

The Respondent submitted that Ms Vongpraseuth was "biased in favour" of Mr Lee and the Applicant because of her familial relationship with Mr Lee, and that: …care should be taken by the Tribunal in its approach to Ms Vongpraseuth's evidence, with particular care in relation to evidence for which the only corroboration is Mr Lee. The evidence is that Ms Vongpraseuth will unquestioningly do Mr Lee's bidding (for example by creating a false log for him).
I reject those submissions. The evidence does not amount to a conclusion that she would "unquestioningly do Mr Lee's bidding", or that she had, in fact, knowingly created a false log for Mr Lee in circumstances subject to his 2015 criminal convictions. The evidence allows the conclusion that Mr Lee deferred responsibility for making the false entries to Ms Vongpraseuth, not that she actually made them. When questioned about her "loyalty" to Mr Lee, Ms Vongpraseuth sought appropriate clarification, which was not provided, resulting in her not responding to the question further. She was not, as submitted, evasive, but careful in seeking to understand the questions put to her, in circumstances where English was not her first language. Her evidence was considered and direct when the questions were clarified.
Ms Vongpraseuth's responsibility in the day to day management of the Applicant's business was considerable, according to both her and Mr Lee's evidence. This included the paperwork and record keeping required to comply with the MDR Act and Regulations. She was not a licence holder under the MDR Act, and was not alleged to be a "close associate" of the Applicant for the purposes of these proceedings. There is no evidence supporting an allegation or finding that she was aware of or had appropriate knowledge of the requirements of the MDR Act and Regs for the purposes of managing the Applicant's business, or any other of Mr Lee's businesses. Ms Vongpraseuth's evidence regarding her completion of the Form 1 entries supports her lack of knowledge about the obligations and requirements of the MDR Act and Regs, as she was ignorant to the specific legislative requirements. So whilst I do not accept there is evidence that Ms Vongpraseuth would do Mr Lee's bidding "unquestioningly", I accept Ms Vongpraseuth's evidence and the Respondent's submission that Ms Vongpraseuth worked at the direction and instruction of Mr Lee.
In evidence, Ms Vongpraseuth conceded in cross examination that certain matters contrary to her statements were possible, but did not believe them to be likely or had not considered them. She presented as a careful, straight-forward and direct witness, if naïve to the intentions of others or alternate possibilities having occurred to her understanding of events.
The Respondent submitted that "Ms Vongpraseuth's evidence that she was responsible for the F1 [Form 1] is of recent invention and intended to assist the Applicant to avoid its liability under the MDR Act". I reject that submission as being unsupported by the evidence.

[21]

Source of s 58 documents

The Respondent provided a table in evidence, as an annexure to the investigating officer, Ismail Eyvaz's affidavit, of the origins of each of the documents contained in Volumes 2 to 5 of the section 58 documents, which became "Exhibit R4". The vast majority of the documents were stated to have been sourced from the search warrant conducted at the Applicant's business premises on 16 February 2016.
The Applicant submitted that the Tribunal could not rely on the documents identified as having been sourced from the search warrant of its premises because the exhibits book does not assist in identifying any of the documents seized, the exhibits officer did not give any evidence, and the video of the execution of the search warrant does not provide that level of detail either Further, the First Show Cause was issued on the same day as the execution of the search warrant, which indicated that the Respondent already had the material on which it relied for the purpose of making the relevant allegations, prior to the execution of the search warrant.
I accept the Applicant's submissions The exhibits book from the execution of the search warrant itemises 115 hanging files as seized Item 29, but does not specify which of the documents relied on in these proceedings, if any, were contained in those files The audio visual recording of the search warrant does not provide support for the conclusion that each of the documents said to have been located during the search warrant were, in face, sourced from the Applicant's premises as alleged.
Nor does the evidence of Mr Awad and Mr Eyvaz sufficiently support their assertions of the sources of the documents in question. Mr Awad was the Respondent's investigating officer of various of Phillip Lee's companies from 2013 until Mr Eyvaz took over that investigation in January/February 2016. Mr Awad swore the affidavits to obtain the search warrant, which were not included in the evidence before the Tribunal, and referred to a joint operation with NSW Police including notes in a TRIM database, of which evidence was also not provided to the Tribunal. He gave evidence of his understanding of how vehicles were imported from Japan and the role of JEVIC which, in cross examination, he accepted was incorrect and not within his own knowledge. I place no reliance on this evidence as a result.
Mr Eyvaz's evidence, which included his responsibility for the conduct of the investigation and search warrant commencing in the weeks prior to the search warrant occurring on 16 February 2016, was of limited assistance. He had no knowledge and did not check whether or to what extent the Respondent had documents supporting the First Show Cause, or the issuing of the search warrant, and relied wholly on a table provided by Mr Awad regarding the source and date of documents said to have been obtained from google or unspecified Russian online sources He stated under cross examination that he would "bounce information" off Mr Awad, that they worked together, and that Mr Awad continued his involvement in the investigation after handing over to Mr Eyvaz, which I accept is likely on the evidence, but does not assist the Respondent in convincing the Tribunal of the reliability of Mr Eyvaz's evidence. On the basis of his evidence at hearing, I place minimal weight on Mr Eyvaz's evidence regarding the veracity and reliability of the documents contained in Volumes 2 to 5 of the section 58 documents

[24]

JEVIC records

The Respondent relied on records supplied by JEVIC, located at pages 3 - 4, 9 -13, 37 - 43, 92 - 100, 146 - 155, 200 - 203, 222 - 229, 233 - 239, 322 - 330 of Volume 2, pages 3 - 11, 306 - 309 of Volume 3, pages 71 - 79, 139 - 143, 176 - 183 of Volume 4, and pages 2 - 8, 39 - 45, 82 - 88, 115 - 121, 162 - 170, 199 - 205, and 251 - 259 of Volume 5 of the s 58 documents The Respondent submitted that the JEVIC certificates and particularly the CVRH (Certificate of Vehicle Registration and History) from the Japanese Transport Bureau and auction documents (including translations) provided by JEVIC, were a reliable, independent source of vehicle odometer readings The Respondent submitted that: JEVIC certificates have been relied upon for this purpose by this Tribunal in other proceedings dealing with odometer fraud (Mishra v Prestige Auto Centre Pty Ltd and Khan Motorcar Co Pty Ltd [2015] NSWCATOD 106 at [46] (Mishra)).
Mishra is not general authority for the reliability of JEVIC certificates or other JEVIC records Mr Jackson conceded that the records he had provided to the Respondent from JEVIC contained errors, some of which were consistent over multiple records such as the erroneous description of multiple cars as "Mitsubishi Delica". He explained that at the time JEVIC produced the certificate he did not know that the JEVIC certificates were to be used in proceedings The Tribunal infers from Mr Jackson's evidence that the JEVIC records were not checked sufficiently in relation to their source material, for accuracy and reliability, prior to them being provided to the Respondent.
The source of the information in the JEVIC certificates was identified by Mr Jackson to have come from: 1. Copies of CVRH obtained by JEVIC, which were then translated by JEVIC staff; 2. Information recorded on the NAAA database, which is sometimes provided on request to JEVIC; 3. Auction reports from car auction houses
Mr Jackson also agreed in cross examination that the Respondent had provided him with odometer readings to include in the JEVIC certificates
Whether and to what extent the information contained in each particular JEVIC certificate was reliably sourced and verified was not ascertained by Mr Jackson prior to providing the records to the Respondent. Nor was the reliability and veracity of the information in the source material of the JEVIC certificates checked. Inaccuracies, errors, false reporting and recording could have taken place at any stage prior to the information being obtained by or provided to JEVIC, according to Mr Jackson's evidence, which I accept. I accept the Applicant's submission that the JEVIC records relied on by the Respondent in these proceedings are unreliable.

[30]

Volumes 6, 7, 8

Records for an additional 9 vehicles were included in Volume 6. The VINs for vehicles included in Volume 6 were: PE52003061, TRH2140026083, ACR30-0284237, MCR30-0072666, GGH20-8049395, GGH20-8017762, ACR30-0283198, GGH258010353, NE51050940. None of those vehicles were the subject of findings in the Second Show Cause, or the Second Determination. The Respondent submitted that they were relevant to the Tribunal as demonstrating a course of conduct by the Applicant. Whilst I accepted those documents into evidence, I agree with the Applicant's submission that minimal weight should be afforded to those records in the circumstances, and that they do not properly form part of the section 58 documents
Volume 7 contained the following affidavits: 1. Susan Bravo Robosa dated 24 January 2017; 2. Susan Bravo Robosa dated 27 February 2017; 3. Ismail Eyvaz dated 14 March 2017; 4. Ahmad Awad dated 14 March 2017; 5. Steven Phillip Clark dated 14 March 2017; 6. Mohammed Ayub Khan 15 March 2017.
The Second Determination was issued on 14 March 2017. On review of the affidavits contained in Volume 7, I consider it unlikely, on the basis of their contents and the dates on which they were sworn, that the affidavits of 14 March 2017 and 15 March 2017 were before the decision maker who made the Second Determination of 14 March 2017. I find that they were drafted for the purpose of supporting the Second Determination post-fact, and therefore do not fall within the parameters of section 58 of the ADR Act.
The affidavits of Ms Robosa dealt with the conduct of the litigation and were not relevant to the Tribunal's determination. The affidavits of Mr Eyvaz, Mr Clark and Mr Khan dated 14 and 15 March 2017 dealt narrowly with the execution of the search warrant and I consider them of limited relevance and weight for the reasons expressed above at [53] to [56]. For the reasons expressed above at [42] to [52], I place no reliance or weight on the evidence in Mr Awad's affidavit dated 14 March 2017.
Volume 8 contained the JEVIC records already included in Volumes 2 to 6. It was filed by the Respondent as reply evidence in response to the Applicant's objections and submissions regarding the veracity and origins of the JEVIC documents. They therefore do not fall within the parameters of section 58 of the ADR Act, and I place minimal reliance and weight on those documents for the same reasons as those expressed above at [91] to [96].

[31]

Biosecurity inspection records

The Department of Agriculture requires biosecurity inspections for vehicles imported into Australia. These physical inspections can be done prior to or after importation into Australia. Whilst the Department itself conducts these inspections, they can also be done by approved third-party sites JEVIC has approval to undertake these inspections in various facilities located throughout the major ports of Japan, and I accept Mr Jackson's uncontested evidence that biosecurity odometer readings were included in the biosecurity inspections requested and recorded at port in Japan prior to shipping to Australia. I distinguish JEVIC's biosecurity inspection records from the balance of JEVIC material before the Tribunal on the basis that their reliability is uncontested and the evidence supports their accurate recording from the vehicles in question.
Mr Lee referred to the biosecurity inspection in the recorded conversation of 4 August 2016 when he stated to Mr Awad and Mr Eyvaz, "Why don't you check all the records of when the cars hit the wharves because they record the mileage, and that will tell you the answer to the story and you obviously haven't done that yet", which I infer to refer to the biosecurity inspections required by the Department of Agriculture. Mr Eyvaz confirmed in cross examination that this had not been done by the Respondent, stating that the biosecurity data was being sought through the Attorney-General as part of an "ongoing investigation".
The Applicant alleged that the Respondent was aware of or otherwise had the biosecurity inspection records for the 37 vehicles but had either refused or failed to provide them to the Applicant and Tribunal when requested. It relied on the evidence of Mr McIntyre, who at hearing stated that he had received and complied with a request from the Respondent pursuant to section 20 of the Fair Trading Act 1987 in mid-2016 seeking access to biosecurity inspection data recorded by JEVIC in Japan, and emails located in summonsed records which showed requests from the respondent to JEVIC for biosecurity inspection records in 2016.
Mr Jackson stated in evidence that JEVIC received a request for records for Japanese odometer histories from the respondent prior to November 2016, and the JEVIC records were produced to the Respondent in November 2016 as a result. He confirmed in evidence that even if the Respondent had requested the biosecurity inspection records, he would not have provided those to the Respondent, because the information belonged to the client which had paid for the biosecurity inspections, which was Autohub. On review of the evidence, including the summonsed material produced by the Respondent, I accept Mr Jackson's evidence.
I accept the evidence of Mr McIntyre that he responded to a request from the Respondent seeking the JEVIC biosecurity inspection records Mr McIntyre described the request as "compulsory": …it was compulsory. I got given a notice to produce, so I produced the document. There was a formal email and letter sent to me with a list of VINs and then I provided not only that list, but I also gave the Customs entry, odometer rating, commercial documents, everything. Basically everything we have in our file for importing that we did.
However on reviewing Mr McIntyre's evidence and the summonsed records produced by the Respondent, I find that Mr McIntyre is here referring to the request by the Respondent for documents and information made in November 2016, which did not occur in mid-2016 as stated by Mr McIntyre in his oral evidence.
Attached to the affidavit of Mr Eyvaz dated 7 June 2017 were emails dated 4 August 2016 between Mr Lee and Mr Eyvaz regarding Mr Lee's authorization for the Respondent to obtain information from JEVIC. This supports the recorded conversation of 4 August 2016 in which Mr Lee offered to provide the Respondent with the odometer recordings for the vehicles at the time of their inspection on the wharves, which I have inferred relate to the biosecurity inspections. Considering Mr McIntyre and Mr Jackson's evidence in the context of the emails included in the summonsed material produced by the Respondent, on the balance of probabilities, I consider it likely that the Respondent did not have the biosecurity inspection records at the time that the recorded conversation occurred in August 2016. However, it was engaged in the process of obtaining those records from JEVIC at that time.
Prior to April 2016, the Respondent had sought documents from JEVIC, including the JEVIC Vehicle Condition Reports which recorded the odometer reading - to assist in its broader investigation of odometer tampering, which was not confined to the Applicant's business JEVIC raised concerns with the Respondent regarding the Respondent's powers and jurisdiction to compel the production of records which "may be constrained by its other obligations e.g. of confidence/privacy". Between April and June 2016, JEVIC and the Respondent communicated regarding those concerns. By June 2016, the Department of Agriculture was involved in requesting "documents for audit purposes under the offshore inspection service standards". On 1 June 2016 the Respondent asked JEVIC to "please make enquiries with the Japanese Exporter for permission to release the JEVIC inspection reports", which I infer from Mr Jackson's evidence to be referring to the biosecurity inspection records on the basis that these were only available to JEVIC's client, the individual or company which booked the inspection.
Between June and November 2016, the Respondent's request to JEVIC was diluted from requesting the biosecurity inspection records, to requesting the compilation and translation of the JEVIC records which ultimately were included in the section 58 material for each of the 37 vehicles and comprise Volume 8 of the material filed by the Respondent with the Tribunal. That is the extent of the evidence before the Tribunal in relation to the Respondent's request for the biosecurity inspection records, as a consequence of which I decline to make the finding sought by the Applicant, to the extent that it is relevant to these proceedings.
The biosecurity inspection records which are before the Tribunal were provided by Mr McIntyre as annexures to his evidence. Those annexures include odometer readings for 12 of the 37 vehicles: Vehicles 3, 4, 5, 7, 12, 14, 19, 22, 25, 28, 29, and 35. I accept those odometer readings as an accurate recording of the odometer of those vehicles prior to export from Japan.

[32]

Antecedents

On about 18 February 2009, Mr Lee was found by this Tribunal to be an "unsatisfactory" witness and to have engaged in conduct calculated to conceal earlier misconduct, in Adams v Japanese Auto Centre Pty Ltd (Motor Vehicle) [2009] NSWCTTT 47. In those proceedings, the Tribunal inferred that Mr Lee "was endeavouring to conceal the extent of his own failings whilst also undermining the applicant's claim."
On about 18 February 2015 Mr Lee attempted to conceal his commission of offences under clause 48 of the Road Transport (Vehicle Registration) Regulation 2007, which provides that: Any driver or person in charge of a registrable vehicle to which a trader's plate is affixed or any person to whom a trader's plate has been issued must, when required to do so by any police officer, immediately answer truthfully all questions that are put to the person concerning the purpose for which the plate is used.
According to the amended facts relevant to Mr Lee's plea of guilty and conviction on about 30 June 2015, Mr Lee not only failed to "answer truthfully" but gave a false story to Police, asked another person to lie to Police to corroborate that story, and instructed Ms Vongpraseuth to create a log containing false information to corroborate that story.
Whilst Mr Lee's previous convictions and findings about his character in other Tribunal proceedings were not a basis on which the Applicant's licence was suspended or cancelled pursuant to the Second Show Cause or the Second Determination, I reject the Applicant's submission that it would be a "denial of procedural fairness to allow this material to be used as a ground for supporting cancellation because of the failure to put this evidence in the required NSC, or in the s 58 documents or in evidence at all". The material is not accepted by the Tribunal as a "ground" for supporting cancellation, but is evidence available to the Tribunal on which it can make findings regarding the grounds which are before the Tribunal, specifically the fitness and propriety of the Applicant's "close associates". The evidence was tendered at hearing and the Applicant had sufficient opportunity during the hearing and in written submissions to address that evidence.

[34]

Customer statutory declarations

A number of statements and statutory declarations were filed by the Applicant from individuals who were not called for cross examination. I accept their evidence, therefore, on its face. These included: 1. Rick Kelly, a co-owner of 'Nissan Motorsport' who purchased Vehicle 4 from the Applicant which was included in the Respondent's allegations. Mr Kelly expressed knowledge of the allegations against Mr Lee and the Applicant, stated that he was never contacted by the Respondent in relation to those allegations, and confirmed the Applicant's evidence that he was warned about the unreliability of the odometer history. He described the circumstances of his purchase of Vehicle 4 from the Applicant and his satisfaction with that purchase. 2. Francesco Bellissimo, a solicitor, who purchased Vehicle 20 from the Applicant which was included in the Respondent's allegations. Mr Bellissimo expressed knowledge of the allegations against Mr Lee and the Applicant, stated that he was never contacted by the Respondent in relation to those allegations, and confirmed the Applicant's evidence that he was warned about the unreliability of the odometer history. He described the circumstances of his purchase of Vehicle 20 from the Applicant and his satisfaction with that purchase. 3. Sami Nasif, an importer of used cars from Japan, licensed motor dealer and motor mechanic. Mr Nasif's evidence confirmed the evidence which the Tribunal has accepted regarding the importation process and requirements. 4. Adrian Alexander, who purchased Vehicle 5 from the Applicant which was included in the Respondent's allegations Mr Alexander expressed knowledge of the allegations against Mr Lee and the Applicant and confirmed the Applicant's evidence that he was warned about the unreliability of the odometer history. He described the circumstances of his purchase of Vehicle 5 from the Applicant and his satisfaction with that purchase. 5. Colin May, a school principal who purchased a number of vehicles from the Applicant and Mr Lee. Mr May expressed knowledge of the investigation against Mr Lee and the Applicant, and described his satisfaction with his dealings with them. 6. Peter Skarmoutsos, from 'IT professional solutions', who gave evidence about the problems accessing and re-installing computer hard drives seized by the Respondent during the execution of the search warrant on the Applicant's premises. 7. Zoran Kulevski of 'Trilogy Towing Services', who gave evidence confirming his experience of the process the Applicant undertook when "booking in" motor vehicles Mr Kulevski had delivered to the Applicant's premises from the importation ports. 8. Milan Jevremovic, an importer of used cars from Japan and licensed motor dealer. Mr Jevremovic's evidence supported the Applicant's submissions about the unreliability of the JEVIC records and the weight to be placed on them by the Tribunal in these proceedings
I accept the evidence from the Applicant's customers that Mr Lee informed them of the unreliability of odometer histories or readings recorded. I thereby accept the Applicant's submission that Mr Lee's usual course was to inform customers of the inaccuracy of odometer readings, because of his inability to control or determine the accuracy of records obtained from Japan.

[36]

Audio recording of 4 August 2016

The Respondent sought to have the audio recording of 4 August 2016 excluded on the basis that the recording was made in breach of the Surveillance Devices Act 2004 (NSW) because Mr Lee did not notify Mr Awad and Mr Eyvaz that he was recording their conversation and did not obtain their consent to that recording. The Applicant submitted the conversation was not private, because it took place in public and because it was between investigators and their subject. The Respondent also submitted that the purpose of the recording was to protect a lawful interest of Mr Lee.
The Tribunal determined that, pursuant to s 38 of the CAT Act, s 138 of the Evidence Act 1995 and the relevant sections of the Surveillance Devices Act 2004, notwithstanding the assertion by the respondent that the evidence was improperly obtained, the Tribunal was satisfied that the probative benefit of the admission of the evidence outweighed exclusion of the evidence. The parties each tendered a transcript of the audio recording.
The Respondent submitted that the audio recording and their transcript of it: 1) corroborated Mr Eyvaz and Mr Awad's recollection of the subject conversation; (ExR33 [17-19]) (ExR32 [2-14]); 2) revealed that Mr Lee's account (ExA6: p. 1-7) of the conversation was partial and deliberately misleading; and 3) revealed no conduct by Mr Awad and Mr Eyvaz that would found an allegation of bias of any kind.
The Applicant submitted that the audio recording and its transcript: 1) Clearly shows Mr Awad and Mr Eyvaz with a view to and the purposes of intimidating Mr Lee: a) Mr Awad suggested that Fair Trading had a secret legal point about 'possession' which they would use against him. b) Mr Awad also suggests that: 'smoke was bellowing out of this place' referring Mr Lee's premises and the alleged evidence of odometer tampering from within it. c) The promise of giving Mr Lee a fair go and interviewing him later proved to be entirely false. 2) Did not corroborate Mr Awad and Mr Eyvaz's version of events in their written affidavits; and 3) Identified a serious issue relevant to the substantive application: that Mr Eyvaz was seeking information from Mr Lee about Bio-security checks done by JEVIC, and that Mr Lee was confident that those checks would exonerate him. The significance of Mr Eyvaz's interest in the subject becomes obvious from the cross-examination of Mr Mclntyre that he had provided this Bio-security inspection material in 2016.
In the audio recording, Mr Awad provided some context for the Tribunal of the respondent's investigation: Mr Awad: I understand but the thing is that we, there was a big mole that we couldn't ignore. We had a number of complaints and… Mr Lee: What's a mole? Mr Awad: Something that we saw that needed attention and so we took action. Mr Lee: It's an industry problem mate. It's not… Mr Awad: Absolutely, we know that… Mr Lee: I feel like you are just picking on me because I… Mr Awad: No, no, the least… Mr Lee: I'm a high profile person with my face all over Youtube. Mr Awad: You are, you are high profile and that's the honest truth and you may have caught our attention because you were high profile and maybe the Government needs to be seen to be doing something, I'm just… Mr Lee: It's political, yeah Mr Awad: Yeah look I'm being honest with you. Maybe, maybe that could be a…ah one of our impetus that we went after you for that reason but the fact is you are operating in that area in that realm and the fact that we are alleging is that there are a number of cars that had, you know, odometer discrepancies and that's why we are here. That's the whole reason why we are here mate. So we are here to obviously, we all came to investigate and we are still investigating, and it's a process so… um…
On review of the audio recording and the transcripts, I accept the Applicant's submissions and consider the recording to be relevant to the Tribunal's consideration of the evidence from Mr Awad, Mr Eyvaz and Mr Lee. Included in that consideration is the fact that Mr Awad and Mr Eyvaz were not aware that the conversation was being recorded.

[38]

"Close Associates"

The Respondent's Determination and its submissions relies on the relationships between the Applicant and various other entities, including ELJAC, Golee, Terrano, Angela Reidy Pty (AR), ELIOS Pty Ltd, 4 Wheelers Pty Ltd, and AutoHub Pty Ltd, and the roles that Edward Lee and Philip Lee did or did not have in those companies
The Second Show Cause alleges that ELJAC, Golee, Terrano, Edward Lee and Philip Lee are "close associates" of the Applicant. The extent to which those relationships identified in the Second Show Cause are "close associates" is relevant to the Tribunal's determination as to whether the Applicant has contravened s 39(b) of the MDR Act, or falls within the parameters of s 25 of the MDR Act for the purpose of determining fitness and propriety.
"Close associate" is defined at section 8 of the MDR Act: (1) For the purposes of this Act, a person is a "close associate" of an applicant for a licence or a licence holder if the person: (a) holds or will hold any relevant financial interest, or is or will be entitled to exercise any relevant power (whether in the person's own right or on behalf of any other person), in the business of the applicant or licence holder that is or will be carried on under the authority of the licence, and by virtue of that interest or power is or will be able (in the opinion of the Secretary) to exercise a significant influence over or with respect to the management or operation of that business, or (b) holds or will hold any relevant position, whether in the person's own right or on behalf of any other person, in the business of the applicant or licence holder that is or will be carried on under the authority of the licence, or (c) is or will be engaged as a contractor or employed in the business of the applicant or licence holder that is or will be carried on under the authority of the licence. (2) For the purposes of this section, a financial institution is not a close associate merely because it has a relevant financial interest in relation to a business (3) The provisions of this section extend to relevant financial interests and relevant powers even if those interests and powers are not payable, exercisable or otherwise enforceable as a matter of law or equity, but are nevertheless payable, exercisable or otherwise enforceable as a matter of fact. (4) In this section: "relevant financial interest" in a business means: (a) any share in the capital of the business, or (b) any entitlement to receive any income derived from the business, or to receive any other financial benefit or financial advantage from the carrying on of the business, whether the entitlement arises at law or in equity or otherwise, or (c) any entitlement to receive any rent, profit or other income in connection with the use or occupation of premises on which the business is or is to be carried on (such as, for example, an entitlement of the owner of the premises at which the business is carried on to receive rent as lessor of the premises). "relevant position" means: (a) the position of director, manager or secretary, or (b) any other position, however designated, if it is an executive position. "relevant power" means any power, whether exercisable by voting or otherwise and whether exercisable alone or in association with others: (a) to participate in any directorial, managerial or executive decision, or (b) to elect or appoint any person to any relevant position.
The Applicant, ACN 602 862 199, was registered as a company with ASIC on 14 November 2014. The Applicant's Director, Secretary, and sole shareholder is Philip Lee. Philip Lee is thereby a close associate of the Applicant.
The Applicant's principal place of business registered with ASIC is recorded as xxxx, which is also registered as Philip Lee's residence. Its registered office is listed as Suite 601, Level 6, 74-76 Burwood Road, Burwood NSW 2134. Business addresses at 73 Parramatta Road, 77 Parramatta Road and 71-75 Parramatta Road Concord NSW 2137 are recorded in various public record licensing documents by the respondent and Service NSW.
Philip Lee was also the sole director and shareholder of Golee Pty Ltd, which had xxxx and 73 Parramatta Rd Concord as its registered office at various times, and 73 Parramatta Rd Concord as its principal place of business; and ELJAC, which had 71 Parramatta Road Concord as its registered office and principal place of business. Philip Lee is thereby a close associate of Golee Pty Ltd and ELJAC.
Philip Lee's father, Edward Lee, was a director and shareholder of Rising Sun Cars Australia Pty Ltd, ACN 000 606 851, which had 77 Parramatta Rd Concord and 71-75 Parramatta Rd Concord listed as its registered offices and principal places of business. Rising Sun Cars Australia Pty Ltd was formerly known as Edward Lee's Pty Ltd, Edward Lee's Japanese Auto Centre Pty Ltd, and Edward Lee Motors Pty Ltd. Edward Lee was also the director and sole shareholder of Terranocraft Pty Ltd, ACN 088 103 093, which had as its principal place of business and previously registered office 71-75 Parramatta Road, Concord. Edward Lee is thereby a close associate of Rising Sun Cars Australia Pty Ltd and Terranocraft Pty Ltd.
According to the Certificate of Title and various lease agreements, the properties at 71-75 Parramatta Road Concord NSW 2137, titled as Lot 1 in DP632659 in Croydon are owned by Edward Lee. Edward Lee is thereby a close associate of the businesses at the properties of 71-75 Parramatta Road, Concord, including the Applicant, Golee Pty Ltd, ELJAC, Rising Sun Cars Australia Pty Ltd and Terranocraft Pty Ltd.
The Respondent asserted that each of AR, Golee, Terrano, ELJAC, the Applicant and Philip Lee were close associates of each other, on the basis that: 1. AR was an agent of ELJAC and the Applicant; 2. the Japanese exporters ELIOS and 4 Wheelers were the agents of AR; 3. Golee and Terrano were agents of ELJAC and the Applicant; 4. Phillip Lee was the controlling mind of all of the agency relationships, and was a close associate of each of AR, GOLEE, ELJAC and the Applicant because he was a director of each of the companies and held a relevant position in the business; 5. AR was a close associate of ELJAC and the Applicant because it was their agent and had a relevant financial interest in the business; 6. Golee and Terrano were close associates of ELJAC and ELI because they were their agents and had a relevant financial interest in the business; 7. The Japanese buying and export agents (ELIOS and 4 Wheelers) were close associates of AR because they were its agents and had a relevant financial interest in the business; 8. The Japanese buying and export agents (ELIOS and 4 Wheelers) were close associates of ELJAC and the Applicant because they were AR's agents and AR was ELJAC and the Applicant's agent.
The respondent submits that the records contained in the section 58 documents support these findings, but it does not explain which of the documents it relies on in relation to each assertion, and the extent to which or how they support the submission. There is insufficient evidence on which the Tribunal could make such broad, generalised findings regarding agency and financial interests within the meaning of the MDR Act.
On the basis of the evidence before the Tribunal, including Mr Lee and Ms Vongpraseuth's oral evidence, I find that Philip Lee is a close associate of AR, Golee, ELJAC, Terrano and the Applicant, pursuant to sections 8(1)(a) and 8(1)(b) of the MDR Act. I accept that Philip Lee exercised power and control over each of those entities. The remainder of the Respondent's assertions, expressed at [147] above, are not made out.

[40]

Odometer recording

The recording of a vehicle's odometer took place at various stages of its sale in Japan, exportation from Japan, importation into Australia and sale in Australia. For the reasons expressed above, I consider the readings in the JECs and auction records from Japan to be unreliable. I accept the readings in the JEVIC biosecurity inspection records as reliable. I accept that the vehicles were advertised with the submitted odometer readings, but consider the date on which those advertisements was published to be unreliable. I accept the odometer readings recorded in the RAW CINs as reliable, and rely on the Form 1 dated 9 November 2016 as accurately recorded. I also rely on the Contracts for Sale located in the section 58 material as reliable copies of those prepared or executed on their stated dates.
A comparison table of the odometer readings which I rely on is as follows: Table 2 - Comparative odometer readings Car No VIN ODO at JEVIC biosecurity ODO in ad ODO in RAW CIN ODO in F1 dated ODO in contract for sale 9 Nov 2016 1 PE52-003195 7,000 7,895 7,871 2 NE51017716 56,000 56,416 56,420 3 E51114743 62,174 62,000 62,187 62,179 4 FK10014241 66,152 90,000 113,218 113,000 113,259 5 WGNC34133102 107,034 107,035 107,035 107,035 107,238 6 JZX1106021444 42,040 42,040 44,571 7 E51260280 38,120 38,121 a) 38,127 b) 38,129 8 E51265137 25,032 25,066 25,032 9 WGNC34104432 63,046 63,046 10 EP31003201 42,080 42,080 42,080 11 CPV35600863 48,000 56,070 56,080 12 NE51105334 46,0675 46,065 46,000 13 E51263453 12,891 12,909 12,891 14 NE51059611 64,211 64,213 64,224 64,224 15 BNR32308033 74,498 16 EP31001533 52,000 51,123 52,000 17 AE865072646 86,000 81,859 18 ACR307034902 58,000 58,136 58,124 19 MNH100056031 52,000 20 ANH100088768 45,000 43,034 43,335 21 BNR32306589 71,000 22 NE51106037 58,198 58,000 58,236 58,200 23 BNR32306796 74,000 24 CV5W0109574 26,000 26,148 26,151 25 NE51262850 19,115 18,000 19,130 26 NE51110770 38,127 38 137 38 199 27 S15008195 61,000 61,223 61,252 61,221 28 NE51104970 60,131 60,000 60,135 60,135 29 EP31001399 48,931 46,000 48,957 48,958 30 JZA801004129 54,602 54,629; 54,602 31 TRH2140025147 15 000 16 034 16 079 32 TRH2140024513 19 000 19 113 19 100 33 S15007727 58 212 58 212 58 215 34 EP31300012 42 000 43,023 42 082 42 122 35 BZ11344272 38,125 37 000 38 209 38 346 36 NE51230605 29 000 29 478 29 478 37 CV5W0012848 76 301 76 321 76 332

[46]

Findings under s 39(b) of the MDR Act

The Second Show Cause and Second Determination particularised three specific grounds upon which the Applicant was alleged to carry out the business of a motor dealer in a dishonest and unfair manner pursuant to s 39(b) of the MDR Act: 1. Knowingly, reasonably suspecting or recklessly providing vehicles for sale with inaccurate odometer readings; 2. Obtaining records that inaccurately recorded vehicles' odometer readings; 3. Being the "phoenix" company of ELJAC for the purpose of it avoiding statutory obligations;
In the Second Determination, the "dishonest and unfair manner" was particularised by the Respondent as: 1. Providing vehicles for sale whose odometer readings were inaccurate and which the Applicant in respect of vehicles 4, 7 and 26 and ELJAC in respect of vehicles 2, 10, 11, 13, 16, 25, 28 and 36 knew or reasonably suspected were inaccurate or as to the accuracy of which they were reckless; 2. Obtaining records that inaccurately recorded vehicles' odometer readings: the Applicant in relation to vehicles 20, 26 and ELJAC in relation to vehicles 10, 11, 13, 16, 17, 18, 19, 28 and 29. 3. The Applicant being the "phoenix" company of ELJAC in order that ELJAC could avoid its statutory obligations under the MDR Act and MDR Regs
I accept the Applicant's submission on the basis of the evidence from Mr Lee and those customers who provided statutory declarations, that he informed customers of the general unreliability and inaccuracy of odometer histories. I accept Mr Lee's evidence and that of his industry colleagues to the effect that odometer tampering was rife in Japan and that Mr Lee dealt with this assumption by both verbally informing his customers of the unreliability of odometer records for imported second-hand Japanese vehicles, and by including a notice or sign to that effect in the contract for sale.
Whilst I therefore accept the probability that Applicant sold vehicles with inaccurate odometer records and readings, I find that this was not done in an unfair or dishonest manner.
I also find, on the evidence, that whilst some of the records obtained by the Applicant are likely to have included inaccurate odometer readings, there is no reliable evidence to support a finding that this was done by the Applicant in a dishonest or unfair manner.
The Respondent abandoned its allegation regarding the Applicant being the phoenix company of ELJAC in its closing submissions. The evidence before the Tribunal does not support a finding that the Applicant carried out its business in a dishonest or unfair manner by being the phoenix company of ELJAC.
Accordingly, I find that there is insufficient evidence to support the Tribunal making a finding that the Applicant carried out its business in a dishonest and unfair manner within the meaning of s 39(b) of the MDR Act as alleged.

[47]

Findings under s 38(1)(c) of the MDR Act

The final basis on which the Respondent suspended and cancelled the Applicant licence was pursuant to s 38(1)(c) of the MDR Act, on the basis of the Applicant not being a fit and proper person to hold a licence.
Two of the grounds alleged to support the Applicant's failure of fitness and propriety, being the serious nature of breaches of s 52 and s 54, and serious and systematic nature of breaches of s 100 and Sch 2 of the MDR Act have already been addressed above and are not established.
The Respondent also alleged that the Applicant was not a fit and proper person to hold a licence because, pursuant to s 38(1)(d) of the MDR Act, the Applicant's licence application would be required by this Act to be refused because of close associates not being fit and proper persons.
For the reasons expressed above at [148] and [149], Mr Lee is a close associate of the Applicant, and is particularised as a close associate in the Second Show Cause and the Second Determination. His fitness and propriety, as discussed previously, is relevant to the Tribunal's determination in relation to the Applicant's licence and is particularised as a ground supporting the Second Show Cause.
The Applicant objected to the Tribunal's consideration of Mr Lee's fitness and propriety on the basis that it was not specifically particularised in the Second Show Cause in the same manner as was put to the Tribunal by the Respondent at hearing and in submissions. I accept the Applicant's submission that in disciplinary matters, the enquiry by the Tribunal is confined by the matters relied on by the complainant or moving party in their particulars of complaint: Sabag v ACCC (2001) NSW SC 411; King v HCCC (2011) NSWCA 353; Sudath v HCCC [2012] NSWCA 171; Smith v NSW Bar Association [1992 HCA 36; (1992) 176 CLR 256. However these proceedings are not analogous to the cases referred to by the Respondent in its submissions, because Mr Lee's fitness and propriety was particularised as a ground for the disciplinary action, and the Applicant was put on notice throughout the course of the hearing that the Respondent intended to prove and submit that Mr Lee's conduct would be used to support an allegation that he was not a fit and proper person, for the purpose of demonstrating that the Applicant was not a fit and proper person. The Applicant continuously objected to evidence which supported that allegation, and the Tribunal ruled that it was relevant, both to credit and to the Tribunal's determination, which included Mr Lee's fitness and propriety: Mr YOUNG: But, in terms of allegations of impropriety by the licence holder, and those must be particularised. They must be done in the notice to show cause. This has never been done. This is not a matter in the notice to show case. It's not a matter in the determinations. It is not a matter referred to in opening and it's -- SENIOR MEMBER DINNEN: I understand the point that you are making Mr Young and I have had - I don't know how many times I have said it during the course of these proceedings, but I am to have regard to whatever evidence is before me that I consider is relevant to my determination.
The bases upon which the Respondent alleged Mr Lee was not a "fit and proper person" were submitted during hearing and put to Mr Lee in cross examination, over objection. There is no particular or allegation relied on by the Respondent which was not known or addressed by the Applicant or put to Mr Lee. It is not the case, as alleged by the Applicant, that the Respondent "…simply thr[e]w into final submission a rag bag of allegations including matters raised under the guise of being relevant to credit". The Applicant attempted to have the Tribunal rule that the issue was relevant only to Mr Lee's credit as a witness, but the Tribunal did not do so. Mr Lee's fitness and propriety as a close associate of the Applicant was squarely in issue, and was addressed by both parties throughout the hearing and in submissions.
The Tribunal is not restricted to determining Mr Lee's fitness and propriety in the terms expressed by the particularisation of the Second Show Cause, or the Second Determination. It is for the Tribunal to determine whether, on all of the relevant material available to it, Mr Lee is a 'fit and proper' person within the meaning of the MDR Act. Referring also to the relevant legal principles expressed at [28] above, section 27 of the MDR Act specifies: 27 CRITERIA FOR BEING FIT AND PROPER PERSON TO HOLD A LICENCE (1) In determining whether a person is a fit and proper person to hold a motor dealer's licence, a motor vehicle repairer's licence or a motor vehicle recycler's licence, the Secretary may have regard to any of the following: (a) whether the applicant has, in the preceding 10 years, been found guilty of an offence involving fraud or dishonesty (whether in this State or elsewhere), … (c) whether the applicant has been convicted of an offence against this Act or the regulations or another Act administered by the Minister,
The evidence of Mr Lee's criminal convictions in the motor vehicle dealer and repairers industry, including for a dishonesty offence, fall within the parameters of s27(1)(a) and (c). Section 27(4) provides that section 27 does not limit the grounds on which the Secretary may determine that a person is not a fit and proper person to hold a licence.
The Tribunal has considered the assessment of criminality in relation to fitness and propriety in Grenfell v Director General Department of Finance and Services [2013] NSWADT 57 at [15]: "The issue of whether a person is fit and proper due to past criminal conduct is a matter of judgement. In considering that issue the Tribunal is required to take into account the nature and seriousness of the original misconduct, any events relevant to an assessment of the applicant's fitness which have occurred since then, the candour with which the applicant has approached the issue of past misconduct, the applicant's explanation of the misconduct, the impact of the effluxion of time, and the applicant's present circumstances and reputation".
In the case of Poytress v Director General, NSW Fair Trading [2015] NSWCATOD 100 (Poytress) the Tribunal stated at [82]: "… the Tribunal is required to take into account the nature and seriousness of the original conduct, any events relevant to an assessment of the Applicant's fitness which have occurred since then, the candour with which the Applicant has approached the issue of past conduct, the Applicant's explanation of the conduct, the impact of the effluxion of time and the Applicant's present circumstances and reputation…"
In Tosohn at [155]: While Mr Creak continues to deny, minimise and deflect responsibility for his conduct, the public cannot have confidence that he will carry out fairly the responsibilities of a director of the holder of a motor dealer's licence. As Mr Creak is the sole director of Tosohn, the same view must follow with respect to Tosohn .
In evidence, Mr Lee claimed the charges and convictions were unfair and a product of the Respondent's investigation. He attempted to contradict statements in the Statement of Facts which supported the charges and convictions, and deflected responsibility to others. He also attempted to deflect responsibility for the multiple false statements contained in the disclosures section of the application for a Motor Vehicle Repairers Licence lodged on 2 September 2015.
Taking into consideration the factors referred to in Poytress, and applied relevantly to the motor vehicles dealers industry in Trlin v Commissioner of Fair Trading [2003] NSWADT 222 at [44] to [46], the original conduct, as pleaded in the criminal charges and convictions, was serious and specifically relevant to Mr Lee's conduct in the motor vehicle dealers industry. Events relevant to an assessment of fitness and propriety since the criminal conduct include the 2 September 2015 application for a motor vehicle repairers licence in which false declarations were made by him, or on his behalf. His candour and explanation for the conduct, as discussed above, is unsatisfactory. There has been minimal effluxion of time and what time has passed, I consider insufficient in the context of his inability to acknowledge his conduct subject to the criminal convictions. His present circumstances include being subject to investigation and allegations by the Respondent, protracted litigations and, on his evidence, a negative impact on his finances, business and reputation.
In the circumstances, the Tribunal concludes that Mr Lee is not a fit and proper person to hold a licence within the meaning of the MDR Act.

[48]

Penalty

The grounds for the Second Show Cause relied on Mr Lee's fitness and propriety pursuant to ss 38(1)(c), 38(1)(d) and 25(5)(a) of the MDR Act. Section 38(1)(c) of the MDR Act provides a basis for disciplinary action, that the Applicant is not a fit and proper person. Section 38(1)(d) of the MDR Act provides a separate basis for disciplinary action, that the Secretary would be required to refuse an application for a licence by the Applicant. Section 25(5)(a) of the MDR Act is the mechanism by which the Secretary, and therefore the Tribunal in these proceedings, can exercise a discretion to refuse to grant a licence to the Applicant, on the basis that their "close associate" is not fit and proper.
The basis for the disciplinary action against the Applicant is found. The Applicant is not a fit and proper person, on the basis that its close associate, Mr Lee, is not a fit and proper person.
Section 46 of the MDR Act requires mandatory licence cancellation if the licence holder is not a fit and proper person. Accordingly, the Applicant's licence must be cancelled. The Respondent's Second Determination included disciplinary action of disqualification for 10 years, pursuant to s 45(1)(f) of the MDR Act. The question remains whether that penalty is appropriate in the circumstances held by the Tribunal, for the purpose of determining the correct and preferable decision.
The objects of the MDR Act include "to establish appropriate standards of conduct and transparency for motor dealers, motor vehicle repairers and motor vehicle recyclers". The underlying purpose of disciplinary action is protective, not punitive. The Respondent's allegations against the Applicant were certainly on the high end of the scale of possible contraventions of the MDR Act, including serious and systematic contraventions of the very provisions for which the MDR Act was introduced, as described in [15] above. Of all the allegations levelled at the Applicant by the Respondent, the only ones the Tribunal has accepted are a technical breach of s 100 of the MDR Act, and the fitness and propriety of Mr Lee. While the finding that Mr Lee is not a fit and proper person is indeed serious, the penalty of cancellation goes some way to provide the public with protection they may need from the Applicant as a result. However, it is not sufficient in circumstances where the Applicant could, upon cancellation, reapply for a licence immediately.
The Tribunal is also concerned by Mr Lee's practice in deferring responsibility for compliance with his obligations under the MDR Act and Regs to others, including Ms Vongpraseuth, to act on his instructions. If the Applicant's licence were cancelled, there is nothing preventing it reapplying for a licence with different directors and managers, in circumstances where Mr Lee continues to provide instruction to those directors and managers. A period of disqualification is necessary to protect the public, to provide a period of time for any individuals who wish to be involved in the management or direction of the Applicant's business to obtain appropriate qualifications and experience to ensure their individual knowledge of the MDR Act and Regs, and to allow them time to demonstrate their fitness and propriety in the industry. An appropriate period, following the Tribunal's previous determinations in such matters, would be two years: Aria Jap International Pty Ltd v Commissioner for Fair Trading, Office of Fair Trading [2006] NSWADT 166, Flanagan v Commissioner of Fair Trading [2004] NSWADT 166, Assadourian v Roads and Traffic Authority [2013] NSWADT 6.
I have not agreed with the majority of the allegations levelled at the Applicant by the Respondent, or their reasoning. Accordingly the correct and preferable decision is to set aside the Respondent's Second Determination and substitute a different decision.

Edward Lees Imports Pty Ltd v Commissioner for Fair Trading

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (51 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (29)

Cited By (5)