Edward Lees Imports Pty Ltd v Department of Finance Services and Innovation t/as Commissioner of Fair Trading

Introduction

1. By summons filed on 28 June 2019, Edward Lees Imports Pty Ltd (the plaintiff) sought leave to appeal against a decision of the Appeal Panel of the NSW Civil and Administrative Tribunal (the Appeal Panel Decision): Edward Lees Imports Pty Ltd v Commissioner for Fair Trading [2019] NSWCATAP 134. It was accepted that the summons was filed within the time specified in the Uniform Civil Procedure Rules 2005 (NSW).
2. The Commissioner for Fair Trading, the defendant (the Commissioner), did not wish to be heard on the grant of leave to appeal pursuant to s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act).
3. The background to the Appeal Panel Decision can be briefly summarised. On 14 March 2017 the Commissioner disqualified the plaintiff from being a licence holder or from being involved in the direction, management or conduct of the business for which a licence is required under the Motor Dealers and Repairers Act 2013 (NSW) for a period of 10 years (the Determination).
4. The plaintiff applied to the Tribunal for review of the Determination. On 27 July 2018, the Tribunal set aside the Determination and, instead, cancelled the plaintiff's motor dealer licence and disqualified the plaintiff from holding such a licence for a period of two years (the Original Decision): Edward Lees Imports Pty Ltd v Commissioner for Fair Trading (No 3) [2018] NSWCATOD 116. The Tribunal did not find that any of the grounds in the Determination had been made out but disqualified the plaintiff on a new ground which had first been raised during cross-examination of Phillip Lee, the plaintiff's sole director and shareholder.
5. On 31 May 2019, the Appeal Panel dismissed the plaintiff's appeal from the Original Decision.
6. It was common ground that the Commissioner, by a delegate, exercised the relevant powers in the present case and that the Commissioner had the powers of the Secretary in the Act. Thus the Commissioner will be referred to in these reasons as the relevant decision-maker, as was the case. Where reference is made to the statutory terms, the word "Secretary" is used.
7. All references to legislation in these reasons are, unless otherwise stated, references to the Motor Dealers and Repairers Act.

NCAT Act

1. This Court's jurisdiction derives from s 83(1) of the NCAT Act which provides that a party to an external or internal appeal may, with the leave of this Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings.
2. Section 38 makes provision for the procedure of the Tribunal relevantly as follows: "38 Procedure of Tribunal generally (1) The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision. (2) 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. … (4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (5) The Tribunal is to take such measures as are reasonably practicable: (a) to ensure that the parties to the proceedings before it understand the nature of the proceedings, and (b) if requested to do so - to explain to the parties any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceedings, and (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. …"
3. I note that neither party submitted that the obligation to provide procedural fairness in s 38(5) imposed a higher obligation in the circumstances of the present case than was imposed by the common law.

Motor Dealers and Repairers Act and Regulations

1. Section 25(5) of the Act relevantly provides: "(5) The Secretary may refuse to grant a licence to an applicant if the Secretary is satisfied of any of the following - (a) that a close associate of the applicant is not a fit and proper person to hold a licence, …"
2. Section 8 of the Act defines "close associate". It was common ground that Mr Lee was its close associate.
3. Section 27 of the Act relevantly provides: "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, …"
4. Part 3 of the Act is entitled "Disciplinary Provisions". Division 1 is entitled "Grounds for disciplinary action" and includes ss 38 and 39. Section 38 sets out the grounds on which disciplinary action may be taken against a licence holder, which include that the person has contravened, or the Secretary has reasonable grounds to believe that the person is likely to contravene, a provision of this Act or the regulations or of any other Act administered by the Minister (s 38(1)(a)) or that the person is not a fit and proper person to hold a licence (s 38(1)(c)) or that, if the person were not a licence holder, the Secretary would be required by the act to refuse an application by that person for a licence (s 38(1)(d)).
5. Division 2 of Part 3 is entitled "Disciplinary process" and contains ss 41-47. Section 41, which is central to the plaintiff's primary submission, provides: "41 Show cause notice (1) The Secretary may give a show cause notice to a person if the Secretary is of the opinion that there are reasonable grounds to believe that there are grounds for taking disciplinary action against the person. (2) A show cause notice is a notice requiring a person to show cause why disciplinary action should not be taken against the person under this Act on the grounds specified in the notice. (3) A show cause notice is to be in writing and is to specify a period of not less than 14 days after the notice is given as the period that the person to whom the notice is directed has to show cause as specified in the notice. (4) The person to whom a show cause notice is given may, within the period allowed by the notice, make oral or written submissions to the Secretary in respect of the matters to which the notice relates. In the case of a corporation, submissions may be made by a director or officer of the corporation. (5) Except as otherwise provided by this 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 submissions made in accordance with the show cause notice."
6. Section 42 confers power on the Secretary to suspend a licence when a show cause notice is given. Section 43 authorises the Secretary to "conduct inquiries and carry out investigations in relation to the matters to which a show cause notice relates and the submissions, if any, made by or on behalf of the person to whom the show cause notice relates."
7. Section 46 provides that it is mandatory to cancel a licence if the holder is not a fit and proper person to hold a licence.
8. Part 4 of the Act, entitled "Obligations relating to sale, recycling and repair of motor vehicles" creates various offences. Section 52 prohibits odometer tampering and s 54 provides that it is an offence for licence holders or their employees not to report suspected odometer tampering to the Secretary. Section 100 of the Act, in Division 8 of Part 4, requires licence holders to keep records in the form prescribed by Part 3 of the Motor Dealers and Repairers Regulation 2014 (NSW) (MDR Regulations).
9. Regulation 42 prohibits motor dealers from advertising, or, during negotiations for the sale of a motor vehicle, specifying, odometer readings that are inaccurate if the motor dealer knows, or reasonably suspects such readings to be "false representation[s]".
10. Section 176 provides that a person disqualified may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 (NSW) (ADR Act).

Administrative Decisions Review Act

1. The ADR Act applies to proceedings in the Tribunal. Section 58 imposes an obligation on an "administrator" (in this case, the Commissioner, being the person who made the decision) to lodge certain documents with the Tribunal. It relevantly provides: "58 Duty of administrator to lodge material documents with Tribunal where decision reviewed (1) An administrator whose administratively reviewable decision is the subject of an application for review to the Tribunal must, within 28 days after receiving notice of the application, lodge with the Tribunal: (a) a copy of any statement of reasons given to the applicant under section 49 (or, if no such statement was given to the applicant, a statement of reasons setting out the matters referred to in section 49 (3)), and (a1) a copy of any statement of reasons for a decision in an internal review conducted in respect of the administratively reviewable decision, and (b) a copy of every document or part of a document that is in the possession, or under the control, of the administrator that the administrator considers to be relevant to the determination of the application by the Tribunal. …" [Emphasis added.]
2. Section 63 provides: "63 Determination of administrative review by Tribunal (1) In determining an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law. (2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision. (3) In determining an application for the administrative review of an administratively reviewable decision, the Tribunal may decide: (a) to affirm the administratively reviewable decision, or (b) to vary the administratively reviewable decision, or (c) to set aside the administratively reviewable decision and make a decision in substitution for the administratively reviewable decision it set aside, or (d) to set aside the administratively reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal."
3. Section 7(1) of the ADR Act defines "administratively reviewable decision" as a decision of an administrator over which the Tribunal has administrative review jurisdiction.

The facts

1. The plaintiff was a licensed motor dealer and repairer, having been granted the motor dealer licence MD054381 on 11 June 2015.

The show cause notices

1. On 16 February 2016 the Commissioner issued a show cause notice to the plaintiff (the First Show Cause Notice). The First Show Cause Notice was subsequently withdrawn, having been the subject of proceedings before the Tribunal which were remitted to the Commissioner.
2. It was common ground that a further show cause notice was issued by the Commissioner to the plaintiff on 5 April 2016 (the Second Show Cause Notice) which alleged that, when applying for a motor vehicle repairer's licence on 2 September 2015, the plaintiff had failed to disclose what the parties referred to as "the Hornsby convictions". The Second Show Cause notice did not rely on the Hornsby convictions per se, but rather the plaintiff's failure to disclose them. It was also common ground that although the Second Show Cause Notice had not been withdrawn, it had not been proceeded with.
3. The Hornsby convictions arose as a consequence of Mr Lee's plea of guilty at the Hornsby Local Court on 10 June 2015 to the offences set out in the following table: Offence Law Penalty imposed 1 Fail to answer questions concerning use of trader's plate Reg 48 of Road Transport (Vehicle Registration) Regulation 2007 (NSW) (now repealed) $110 fine 2 Not record trip details when using traders' plates Reg 47(a) of Road Transport (Vehicle Registration) Regulation 2007 (NSW) (now repealed) $110 fine 3 Use unregistered Registrable Class A Motor Vehicle on Road S 68(1) of the Road Transport Act 2013 (NSW) $640 fine

1. On 6 January 2017, the Commissioner issued a further show cause notice to the plaintiff (the Third Show Cause Notice). A notice of suspension also accompanied this notice. The notice of suspension purported to suspend the plaintiff's motor dealer licence for a period of up to 60 days.
2. The Third Show Cause Notice said as follows: "Acting under delegation from the Secretary, and in accordance with section 41 of the Motor Dealers and Repairers Act 2013 ("MDR Act"), I am of the opinion that there is reasonable cause to believe there are grounds for taking disciplinary action against Edward Lee's Imports Pty Ltd (ACN 602 862 199) in connection with Motor Dealer licence number MD054381. The grounds for my belief are set out in the enclosed Schedule to this Notice. Edward Lee's Imports Pty Ltd has twenty one (21) days from the date of this Notice, to show cause why disciplinary action should not be taken against it. Edward Lee's Imports Pty Ltd may wish to make oral or written submissions, or produce evidence in respect of the matters to which this Notice relates in the manner specified in the accompanying letter."
3. The Schedule to the Third Show Cause Notice set out the allegations against the plaintiff as follows: "2.3 Allegations 18. Upon the evidence referred to under heading 3 below, and for the reasons set out under heading 4 below, I have formed the opinion that it is reasonable to request Edward Lees Imports Pty Ltd to show cause on the following grounds: a. Contravention of the MDR Act (s. 38(1)(a)), in particular: i. Advertising vehicles as having odometer readings that were inaccurate and which you knew or reasonably suspected were inaccurate (s. 42); ii. Odometer tampering (s.52); iii. Failure to report suspected odometer tampering (s.54); and iv. Failure to keep records in accordance with s.100 of the MDR Act and Schedule 2 of the MDR Regulations. b. Carrying out the business of a motor dealer in a dishonest and unfair manner (s.39(b)), in particular by: i. Providing vehicles for sale whose odometer readings were inaccurate and which you knew or reasonably suspected were inaccurate or as to the accuracy of which you were reckless; ii. Obtaining records that inaccurately recorded vehicles' odometer readings; iii. being the "phoenix" company of Edward Lee's Japanese Auto Centre Pty Ltd ("ELJAC") in order that ELJAC could avoid its statutory obligations under the MDR Act and MDR Regulations. c. You are not a fit and proper person to hold a licence under the MDR Act (s.38(1)(c)) due to: i. The serious nature of your breaches of s.52 and s.54; ii. The seriousness and systematic nature of your breaches of s.100 and Schedule 2; iii. If ELI were not a licence holder, your application for a licence would be required to be refused because: 1. ELJAC, Golee Pty Ltd, Terrano Craff Pty Ltd, Edward Lee, and Philip Lee are "close associates" of ELI who are not fit and proper persons for the purposes of s.25(5)(a) of the MDR Act because of their serious and systemic breaches of the MDR Act; 2. ELI is unlikely to carry on the business authorised by a motor dealers' licence honestly or fairly (s.25(4(a))."
4. Particulars of the allegations were set out in section 4 of the Schedule to the Third Show Cause Notice. Section 4.10, entitled "Close associates" alleged: "[77] As stated above, Philip Lee stands behind ELI [the plaintiff], ELJAC and Golee. His knowledge of ELI, Golee and ELJAC's conduct may be attributed to them all. It follows that none of Philip Lee, ELI, Golee or ELJAC is a fit and proper person to hold a motor dealer's licence."
5. Section 4.11, entitled "ELI [the plaintiff] is not a fit and proper person" alleged in [82] that: "If accepted, the allegations set out above demonstrate that ELI is not a fit and proper person to hold a licence under the MDR Act for the purposes of s 38(1)(c) of the MDR Act, for three reasons."
6. The three reasons given were first, the "serious and systematic breaches of the MDR Act and Regulations as set out above"; secondly, that the plaintiff conducted the business of a motor dealer in a "dishonest and unfair manner"; and, thirdly, that if the plaintiff did not already have a licence, the Secretary would be required to refuse an application for a licence because of s 38(1)(d) of the Act.
7. The notice concluded: "[94] I call upon [the plaintiff] to make submissions as to why disciplinary action should not be taken against it concerning the grounds specified in this Schedule."
8. On 14 February 2017 the plaintiff's solicitors responded to the Third Show Cause Notice. They addressed each paragraph of the notice.

The Determination dated 14 March 2017

1. As referred to above, the Commissioner made the Determination on 14 March 2017 to cancel the plaintiff's motor dealer licence and disqualify him from holding such a licence for 10 years. In the reasons for the Determination the Commissioner set out the allegations which had been made in the Third Show Cause Notice before setting out the summary of findings.
2. In the Determination, the Commissioner found the following four specific contraventions of the Act or MDR Regulations (each of which was contained in the allegations in the Third Show Cause Notice set out above): 1. Advertising vehicles as having odometer readings that were inaccurate and which the plaintiff knew or reasonably suspected were inaccurate; 2. Odometer tampering; 3. Failure to report suspected odometer tampering; and 4. Failure to keep records in accordance with s 100 of the Act and Schedule 2 of the MDR Regulations.

The proceedings in the Tribunal before Senior Member Dinnen

1. The plaintiff appealed to the Tribunal against the Determination. The hearing before Senior Member Dinnen took place over nine days: 5 and 6 June 2017, 19, 20, 21, 24, 26 and 28 July 2017 and 2 August 2017.
2. Because of the grounds of appeal raised and the way in which the hearing before Senior Member Dinnen was conducted it is necessary to set out in some detail what occurred. The relevant passages are set out below.

Relevant oral evidence

1. The cross-examination of Mr Lee commenced on 24 July 2017, the sixth day of the hearing. Ms Case, who appeared on behalf of the Commissioner before the Tribunal, asked various preliminary questions at the outset. The following exchange then ensued at tr. 74.40-75.1: "[MS CASE] Q. And you wouldn't in general tell lies where there was a legal consequence upon the evidence that you were giving? A. Well, if you're referring to my criminal record, that's a matter that I'm happy to discuss with you, Ms Case, and I would never intentionally tell lies to you, or to the court, or to anyone, and I'm happy to discuss the matter that occurred as a traffic infringement several years ago during the course of Operation Paris in this investigation. I've got nothing to hide about that."
2. The matter rested at that point. However, on 28 July 2017, while Mr Lee was still in cross-examination and Mr Georges was, for a short period, appearing for the plaintiff in Mr Young's absence, the following exchanges occurred at tr. 101.9-.13 and 101.44-102.4: "MS CASE: Q. So it is your evidence to the Tribunal Mr Lee that you have not previously concocted evidence to get out of a claim against you? MR GEORGES: I object to that. … MS CASE: Q. You have concocted evidence in the past to get out of claims made against you, haven't you? A. I find it very hard to answer that question on the grounds that it is a very vague question so I don't know. Q. On the contrary, it is a very pointed question Mr Lee? A. I don't understand it on the grounds that it is very non-specific. …"
3. Ms Case subsequently asked Mr Lee whether he was charged with any criminal offences on 18 February 2015. The following exchange then occurred at tr. 105.47-107.45: "MR GEORGES: I object to that. It is not relevant member. MS CASE: Senior Member, the witness put the matter of his criminal record in issue on the first day of his cross-examination. MR GEORGES: No, Member it was subject to a question which was also objected to and the witness was required to answer it. I would just like a ruling on relevance to tainting this person for irrelevant matters. SENIOR MEMBER DINNEN: Well there is no tainting of anything. There are questions being asked and there will be submissions made as to what weight I should afford any evidence that is given. The witness has referred to his criminal record. I can't recall if it was in the matter of in-chief or cross-examination but, nevertheless, it has been referred to. Ms Case, you say that the criminal record is relevant -- MS CASE: Yes, Senior Member. SENIOR MEMBER DINNEN: -- to the determination of credit? MS CASE: It is relevant to the question of credit. It is also relevant to the question of fitness which is more broadly relevant. MR GEORGES: Well Member, if it was a matter for fitness it should be in the determination. It should be in the show cause which, by the Act, we are required to get the show cause as a matter of procedural fairness. SENIOR MEMBER DINNEN: Mr Georges, I think you have a mistaken belief of what the Tribunal's role is here. The respondent and the applicant are both required to put whatever evidence is considered relevant to my determination before me. Neither party is confined to matters in the show cause or in the determination. I am to determine whether the decision of the respondent should be upheld and I can make my own reasons for that decision or I can make a different decision. I can set it aside, I can affirm it, I can vary it and the like. So, if Ms Case says now that it is relevant to the issue of fitness, then that is a matter that I can consider. MR GEORGES: Member, exactly what you say, both parties were entitled to put whatever we think was relevant, we didn't go first and the reason for that is procedural fairness. They are to put it to us. Everything that they say is relevant, we have an opportunity to bring material and respond to it. This is being brought at 2.15 on Friday, last day of the hearing so that we have no opportunity to respond to it. That is my objection. SENIOR MEMBER DINNEN: Right. Well, once it has been put, I will ask you what you would like to put on in response to it. MS CASE: Senior Member, it is a matter really for submissions, I think. SENIOR MEMBER DINNEN: Yes. MS CASE: Yes. Q. The question was: were you on 18 February 2015 charged with any criminal offences? A. I was charged, I was found guilty. It was a traffic matter and I believe it was very unfair to me. It is also linked to this whole investigation and proceedings that this whole matter has arisen, I believe very unfairly. Q. Do you think the offences you were unfairly charged? A. I think the circumstances that these things happened was extremely unfair because I was stood by the side of the road for almost four hours and grilled without a solicitor or a barrister and it was very unfair. And it was because of this Operation Paris that came up on the radio that this police man grilled me for four hours, made me feel very uncomfortable and nervous without the presence of my barrister or solicitor. And it was a terrific [sic] offence for not filling out a form correctly about the use of a trade plate. So if that is going to prejudice this case, I am very open about it and I am happy to go through that criminal record and that prosecution in great detail with you Ms Case, as I mentioned to you right at the start of this cross-examination when you first asked me about this matter. SENIOR MEMBER DINNEN: Can I just interrupt you there. Ms Case, are these charges or convictions? MS CASE: Both." [Emphasis added.]
4. Senior Member Dinnen subsequently said, at tr. 108.8-.9: "I am not going behind the facts of this matter - "
5. Ms Case then put a question to Mr Lee to the effect that the convictions were recorded on the basis of facts provided to the court by police. Mr Georges objected and reminded Senior Member Dinnen that she had said that she would not go behind the facts. Ms Case confirmed that the police facts were "relevant to credit". The following exchange occurred at tr. 109.20-.29: "MR GEORGES: Well I object to it because what the Tribunal is saying is, despite what was said earlier, that there is a statement of facts that can be tendered potentially, but you are not going to allow the witness to go behind and give his explanation. SENIOR MEMBER DINNEN: That is right, because he has been convicted. MS CASE: On those facts."
6. Ms Case purported to justify her approach which led to the following exchange at tr. 110.5-.31: "MS CASE: However there is usually - there is a particular process in relation to this kind of cross-examination on credit so I feel bound to do it justice. MR GEORGES: Well, I don't agree with that submission. The usual process is this: these documents are not allow [sic] in evidence. MS CASE: Accept [sic., except] in relation to credit, Senior Member, which is clearly in issue and has been put in issue by the applicant. SENIOR MEMBER DINNEN: This is a fit and proper determination, Mr Georges. If there are issues of credit the Tribunal is bound to hear submissions on that point. If there is evidence, the Tribunal is also able to accept that into evidence. MR GEORGES: But on a plea Member people plea for all different reasons and different documents are tendered at the time. So you are hearing what the respondent wants you to hear and you are seeing what the respondent wants you to see. SENIOR MEMBER DINNEN: No, Mr Georges, in a plea matter a statement of facts is agreed between the parties and that is tendered to the court for the purpose of sentencing."
7. Ms Case then began going through the police facts when she was interrupted by Senior Member Dinnen as follows at tr 111.8-.20: "SENIOR MEMBER DINNEN: No, see this is where - Ms Case, I just don't think it is necessary to go through the facts in the statement of facts in circumstances where he has pleaded to those facts. I can accept the facts at face value. MS CASE: On their face, well certainly Senior Member, if you are prepared to accept those facts as evidence and proof of what they contain then I am happy to rely on those and tender that document and rely upon it. SENIOR MEMBER DINNEN: I am content to accept the facts as evidence of the facts that were accepted." [Emphasis added.]
8. At about this point, Mr Young, who had been temporarily absent from the proceedings, returned to replace Mr Georges, his instructing solicitor. Senior Member Dinnen provided the following explanation to Mr Young of what had occurred in his absence at tr. 112.28-.41: "SENIOR MEMBER DINNEN: Yes. And I have expressed to your solicitor Mr Young, the document's being tendered in the context of credit only, whatever submissions you wish as to the weight of the document, I won't go behind that document on the facts because it is a conviction that has been found in those proceedings to which he pleaded guilty. But if there are propositions that come from that conviction in relation to the current fitness and propriety of the applicant then I think those are questions that are relevant for the Tribunal to hear. MR YOUNG: Yes. But it is put as credit only? SENIOR MEMBER DINNEN: Yes, absolutely."
9. There was then a discussion about the police facts. Senior Member Dinnen expressed her understanding that the police facts document was "the agreed statement of facts tendered in the criminal proceedings". Mr Young submitted that there was nothing on the document that indicated that it was an agreed statement of facts. He submitted, correctly, that a plea of guilty amounted to no more than a plea to the constituent elements of the offence. Notwithstanding this objection, Senior Member Dinnen admitted the police facts as Exhibit R13 and described them as "agreed statement of facts tendered in criminal proceedings". Mr Sheller SC, who appeared with Ms Case in this Court, accepted that the description was incorrect. I note that the police facts were not produced in answer to a summons to the Local Court; they were produced by the NSW Police in answer to a request from the Commissioner, as Mr Sheller explained in his submissions in this Court.
10. It is important to note at this point that police facts have no probative value on sentencing: CL v R [2014] NSWCCA 196 at [45]. Agreed facts must present, in a comprehensible way, the facts and circumstances of the offences upon which the court is to sentence the offender: Della-Vedova v R [2009] NSWCCA 107 at [14]. The statement of facts must be framed so that the court can discern what is agreed to be fact and what is merely assertion: Della-Vedova v R at [11]. A sentencing court is obliged to act on facts that are proved or which are contained in a statement of agreed facts. There was nothing before the Tribunal to indicate the basis on which Mr Lee was sentenced in the Local Court. The police facts were, accordingly, irrelevant.
11. Ms Case then moved to another topic, being an application made by Mr Lee for a licence, which she described as a motor vehicle dealer's licence, on 2 September 2015. The application, which was eventually admitted and marked Exhibit R14, was actually an application by the plaintiff for a motor repairer's licence. Mr Lee agreed that the application form had been filled in incorrectly in more than one respect, including that a negative answer had been given to the question: "Has any individual nominated in this application been found guilty within the preceding 10 years of any offence?"
12. Ms Case then asked Mr Lee whether a notice to show cause had been issued to the plaintiff on 16 February 2016, to which he answered in the affirmative. This was a reference to the First Show Cause Notice referred to above, which had been withdrawn because it was defective and which appears to have been superseded by the Third Show Cause Notice. Ms Case put to Mr Lee that the subject of the notice dated 16 February 2016 related to "the errors contained in that form", being the application for the licence on 2 September 2015.
13. The following exchange then ensued at tr. 118.3-.46: "MR YOUNG: Well, I object to this. I mean, this goes to at 2.30 on Friday afternoon a notice to show cause -- SENIOR MEMBER DINNEN: Mr Young, your solicitor has made several objections in the last half hour about the time. MR YOUNG: I accept that but this is -- SENIOR MEMBER DINNEN: if we didn't have objections about time we would be a little bit more advanced than we are now. MR YOUNG: Well, with respect, to go back now to the 2016 show cause, which I was not prepared to ask this in the questions seems to be grossly unfair. But, in any event, I make the point that it is not the show cause which we are dealing with in this Tribunal. SENIOR MEMBER DINNEN: No, it is not. MS CASE: No, it is not. SENIOR MEMBER DINNEN: Ms Case, please continue. … [MS CASE]: Q. And then on 5 April a notice to show cause was issued against you as the director of ELI and ELJAC on the basis of your convictions that we have just traversed; wasn't it? A. I think all this has been addressed in the past, yes. Q. Do you agree that a notice to show cause was issued on 5 April 2016? A. if you say so, I guess that is - Q. I will show that to you. I will show you a copy of that and maybe that will assist you? A. That is not addressed to me at all. I disagree. MS CASE: I tender that, Senior Member."
14. Mr Young continued to object as set out in the following exchange at tr. 121.3-.39: "MR YOUNG: I object to this. I object to this. This is wholly outside of the show cause - wholly outside of the show cause, not a matter before the Tribunal. This is some sort of boots straps attempt to -- SENIOR MEMBER DINNEN: No, Mr Young. Is there any point Ms Case in putting this hypothetical to the witness? MS CASE: Yes, Senior Member, it again goes to the question of credit and fitness. The evidence just traversed with the witness is to the effect that he failed to make relevant disclosures when renewing his licence, he was on notice of that fact from 5 April -- SENIOR MEMBER DINNEN: No, what I mean in terms of hypothetical, is the hypothetical that he was operating without authority? MS CASE: Yes. SENIOR MEMBER DINNEN: The fact is he did have authority because he hadn't disclosed his convictions; correct? MS CASE: Yes, he had obtained well - Q. You had obtained that authority on false pretences, hadn't you? MR YOUNG: I object to this because this whole line the questioning was put on the basis it went to credit, in creeped two little words, 'and fitness', in other words it is a matter which the Tribunal should have regard to in terms of the determination of this matter, not in relation to credit at all. So that it -- SENIOR MEMBER DINNEN: Well credit does go to fitness. MS CASE: Yes, they do cross over, Senior Member."
15. Subsequently, Mr Young raised the decision of the High Court in Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36 as follows tr. 122.30-.44: "MR YOUNG: But I am sure you are familiar, Senior Member with case[s] like Smith and New South Wales Bar Association. There is also in the medical Tribunal context Sabag and The Health Care Complaints Commission. Now what those cases say is that you must particularise the case against a person in relation to a finding of impropriety. It is not just something that can be changed during the course of a hearing. And to suddenly put questions which may well be legitimate in terms of credit -- SENIOR MEMBER DINNEN: I am hearing them in the context of credit. Any submissions that are to be made on the issues of fitness and propriety I can hear those submissions down the line, but I am hearing these questions in the context of credit and that has been my ruling all along."
16. At the conclusion of the cross-examination, Ms Case tendered the plaintiff's application for the motor dealer licence referred to above, which was marked Exhibit R14. The further exchange occurred at tr. 124.7-.21: "MR YOUNG: I will just ask that it be noted under the same objection in relation to -- SENIOR MEMBER DINNEN: Credit. MR YOUNG: Being relevant only to credit. SENIOR MEMBER DINNEN: Yes. MR YOUNG: And not to an issue in the proceedings. MS CASE: That will be a matter for submissions of course, Senior Member. SENIOR MEMBER DINNEN: Yes."
17. Mr Lee was re-examined but not in relation to these matters.
18. On 2 August 2017, the hearing of the matter resumed. Mr Georges called for production of documents in the Commissioner's possession, including Mr Lee's criminal record. Mr Georges asserted that the Commissioner had not served the document pursuant to s 58(1)(b) of the ADR Act. The following exchange occurred at tr. 5.28. -.37: "SENIOR MEMBER DINNEN: What document was not served? MR GEORGES: Criminal record of our client as a document that the respondent was going to rely on. It was tendered at around 4pm on the last day of hearing. We objected to it, and you stated words to the effect of we would have a chance to put whatever we wanted to in reply. This is our only opportunity to be able to do that. MS CASE: I think it was in submissions, Senior Member."

Written submissions relied on by the parties

1. Directions were made for the parties to serve written submissions and file them with the Tribunal. The Commissioner's submissions, dated 13 October 2017, included the following submissions concerning Mr Lee's evidence: "[106] The Respondent submits that Mr Lee: a. is dishonest; b. has previously lied to authorities to avoid consequences including Police and Fair Trading; c. has conceded relevant offences; d. fabricates evidence as a first resort in responding to allegations of any contravention of the law; e. engages in this conduct in order to avoid responsibility for his unlawful conduct. [107] The Respondent submits that Mr Lee's evidence should therefore not be accepted by the Tribunal unless it is corroborated by reliable independent evidence.
2. The Commissioner submitted at [226] of the written submissions that Mr Lee obtained the plaintiff's motor dealer's licence on false pretences and that he had been in breach of the Act and the Regulations. It was accepted in this Court that these submissions were incorrect. At [228], the Commissioner submitted: "Mr Lee's willingness to mislead, including when caught in a lie, is evidence that he, as the director of a corporate licensee, would not conduct business under that licence in an honest and fair manner."
3. In conclusion, the Commissioner relevantly submitted at [229] that the applicant was "therefore" not a fit and proper person to hold a motor dealer's licence due to matters which included "Mr Lee's unfitness to hold a licence". It can be seen that the convictions themselves were ultimately not relied on but rather Mr Lee's conduct relating to those convictions.
4. In its submissions in response, the plaintiff submitted that the Commissioner was confined to the matters in the Third Show Cause Notice and was not entitled to raise additional matters.

The Original Decision

1. The Tribunal set out the scope of its review in its reasons at [35] as follows: "The Second Show Cause Notice [defined here as the Third 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."
2. The Tribunal addressed the relevance of Mr Lee's convictions at [58] as follows: "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 [the police 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…"
3. The Tribunal assessed Mr Lee's credit at [63] and said: "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…"
4. The Tribunal addressed Mr Lee's antecedents as follows: "Antecedents [122] 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." [123] 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. [124] 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. [125] 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 [defined in my reasons as the Third Show Cause Notice] or the Second Determination [defined in my reasons as the 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." [Emphasis added.]
5. The Tribunal made the following findings: "Application for MV licence [126] The Respondent tendered the Applicant's application for a Motor Vehicle Repairer Licence, lodged 2 September 2015. That application lists Mr Lee as an 'associated party', and contains multiple false statements regarding required disclosures of Mr Lee's convictions, charged offences, disciplinary proceedings, contravention of the MDR Act, winding up of corporations and shared premises. Mr Lee agreed that he was responsible for the accuracy of those false disclosures, but stated that Ms Vongpraseuth completed the application form incorrectly. [127] I accept the Respondent's submission that the Applicant's repair licence renewal was obtained on false information, and that it was Mr Lee's responsibility to ensure the accuracy of the application's contents. Whilst the applicant submitted that the false disclosures could only be considered by the Tribunal as relevant to Mr Lee's credit as a witness, I disagree. It is directly relevant to the fitness and propriety of Mr Lee, a close associate of the Applicant, and the Applicant was given sufficient notice and opportunity to deal with that issue. It is not a new ground, but rather evidence to support the currently existing grounds, which can be put before the Tribunal at any time, subject to an appropriate opportunity for the Applicant to respond and be heard."
6. The Tribunal found that, of the four contraventions of the Act in the Determination (set out above), none of the first three had been established and that, although the plaintiff had contravened s 100 (which required records to be kept), the contraventions were "technical" or "minor": [166]. This was the only matter particularised in the Third Show Cause Notice that had been made out.
7. The Tribunal found, uncontroversially, that Mr Lee was the plaintiff's director, secretary and sole shareholder and was, accordingly, a close associate of the plaintiff.
8. At [173] the Tribunal found that it had not been established that the plaintiff had conducted his business in a dishonest or unfair manner as alleged.
9. Having referred to the limits on its jurisdiction at [35] above, the Tribunal revisited the topic at [180] and said, in a passage which the plaintiff submits is erroneous: "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."
10. The Tribunal turned to the topic of the criminal convictions and said in part: [181] 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 s 27(1)(a) and (c)… … [185] 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. [186] 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 repairer's 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. [187] 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." [Emphasis added.]
11. The Tribunal found at [192]: "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:..." [Citations omitted.]
12. In conclusion, the Tribunal said at [193]: "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."
13. The Tribunal made the following orders: "(1) The Respondent's Second Determination dated 14 March 2017 is set aside. (2) In substitution for that decision, the Tribunal cancels the Applicant's motor dealer licence number MD054381 and disqualifies the Applicant for 2 years from the date of this decision, from being a licence holder or involved in the direction, management or conduct of a business for which a licence is required under the MDR Act."

The proceedings before the Appeal Panel

1. On 8 August 2018 the plaintiff filed a notice of appeal in the Appeal Panel. His grounds of appeal alleged, in substance, that he had been denied procedural fairness. The grounds were as follows: "1. The Appellant was denied procedural fairness in that the matters in relation to the 2015 conviction were not alleged in the Notice to Show Cause and indeed were removed from the 2016 Notice to Show Cause ('the Hornsby Conviction'). Further, the Tribunal stated in allowing questions on the subject that they were "absolutely" put as to credit only. 2. Further, or in the alternative to 2 above, the Appellant was denied procedural fairness in that he was given no notice of any kind in relation to the allegations concerning false declarations made in an application for a licence allegedly lodged on 2 September 2015. 3. The Appellant was denied procedural fairness in not being given any reasonable opportunity to: (a) to tender evidence challenging or explaining the facts underlying the conviction on 30.6.2015 of Phillip Lee or (b) to tender evidence as to the general character notwithstanding the convictions or (c) tender evidence of subsequent disclose [sic] of the conviction in an application for a motor dealer's licence renewal. 4. The Tribunal erred at [127] [sic, [126]] and [127] by holding that the material excepted b[y] the Tribunal was not a ground for supporting cancellation but was evidence available to the Tribunal on which it could make findings on ground which were in fact before the Tribunal. 5. The Appellant appeals from a finding that its close associate, Mr Phillip Lee, was not a fit or proper person. 6. The Appellant appeals from Order 2 and the findings and reasonings [sic] in paragraph [192] of the decision that a period of disqualification was necessary and further that an appropriate period of disqualification was a period of 2 years was erroneous. 7. The Tribunal failed to have regard to the abandonment by the Respondent between the 2016 Notice to Show Cause and the 2017 Notice to Show cause, of any allegation relating to the matters of the Hornsby Court Conviction of any allegation of non-disclosure in relation to these matters.
2. The Commissioner submitted in writing to the Appeal Panel: "[11] Ground 1 appears to be a complaint that the 2015 Application should not have been admitted into evidence because it was not included in material served in advance of the hearing by the Commissioner. The admission of the 2015 Application was a necessary corollary of the Convictions being put into evidence by Mr Lee. There is no rule of evidence or procedure which prevents a party seeking to tender a document which has not been served upon an opposing party when the document tendered addresses the oral evidence of the opposing party the contents of which have not been notified. [12] As a close associate of ELI, Mr Lee's fitness and propriety was in issue because the central issue in the Second Notice was the question of ELI's fitness and propriety. As soon as ELI made the Convictions relevant to the Tribunal's determination… the 2015 Application became relevant on the question of Mr Lee's fitness and propriety. The 2015 Application was ELI's document because it was a document made and submitted by ELI… [13] The Commissioner submits that the Tribunal did not admit the Facts and Convictions for the limited purpose of Mr Lee's credibility, as alleged by ELI. It is clear from the Tribunal's general ruling on evidence made after hearing the parties' extensive objections to evidence and responses thereto, that the Tribunal's approach to evidence in the proceedings was to accept all evidence for all purposes and receive submissions from the parties as to weight. …" [Emphasis added.]
3. The hearing before the Appeal Panel took place on 13 December 2018. The Appeal Panel reserved its decision and published the Appeal Panel Decision on 31 May 2019. The Appeal Panel decided not to conduct a new hearing under s 80(3) of the NCAT Act but rather to hear argument on the evidence which had been before the Tribunal.

The Appeal Panel Decision

1. The Appeal Panel summarised the findings of the Tribunal at [49]-[50] of the Appeal Panel Decision as follows: "[49] The matters about which the Tribunal made findings relevant to the ultimate conclusion the appellant was not a fit and proper person to hold a motor dealer license concerned the application for a motor dealers license in 2015, the making of false statements in connection with that application, the inability of Mr Lee to provide a satisfactory explanation about those events and the fact Mr Lee was a "close associate" of the appellant. [50] In addition, the Tribunal had regard to evidence that Mr Lee had been convicted of various offences under the MDR Act and the circumstances of those convictions." [Emphasis added.]
2. It was common ground that each of the passages highlighted in bold was erroneous. The references to a motor dealer's licence were erroneous since the relevant licence was a motor repairer licence which had been granted under the Motor Vehicle Repairs Act 1980 (NSW) (before it was superseded by the present Act). None of the Hornsby convictions was for an offence under the Act. Each was for summary offences under the Road Transport Act or the Road Transport (Vehicle Registration) Regulation.
3. The Appeal Panel addressed the plaintiff's submission that the Tribunal was confined to matters alleged in the Third Show Cause Notice as follows: "[63] While the respondent accepted that the 2017 Notice 'did not in terms refer to the Facts or Convictions or the 2015 Application' (see written submissions dated 24 September 2018 at para 17), the 2017 Notice did allege Mr Lee was not a fit and proper person to hold a motor dealers license and to be a 'close associate' of the respondent. Consequently, the respondent said the Tribunal was correct to conclude at [180] that it was not restricted to the particulars in the 2017 Notice. The respondent said the enquiry permitted by s 27(1)(a) and (c) of the MDR Act expressly permitted such an enquiry and, in any event, the 2017 Notice "does not confine the question of fitness and propriety to the ambit of the allegations of contravention of the MDR Act" and nor does the MDR Act itself so confine the enquiry. In this regard the respondent referred to ss 27(4), 38(1)(c) and s 46 of the MDR Act."
4. The Appeal Panel, at [64], identified the substance of the plaintiff's complaint to be that "the reason for cancellation as determined by the Tribunal in its Reasons was not particularised in the Second Show Cause Notice."
5. The Appeal Panel extracted [185]-[187] from the Original Decision at [66] and continued at [67]: "It is clear from the Reasons that some of the evidence of Mr Lee's conduct arose in circumstances where the appellant had itself put forward this evidence, albeit said to be relevant to the issue of credit only, which had led to detailed cross examination at the hearing before the Tribunal."
6. The Appeal Panel correctly summarised the plaintiff's submission, which was reiterated in this Court, at [68]: "The appellant said the approach of the Tribunal was impermissible because the findings were about matters not particularised in the 2017 Notice and the legislative regime did not permit the Tribunal embarking on an enquiry in respect of matters not particularised. Reliance was placed on Tosohn as well as Sudath."
7. The Appeal Panel addressed the requirements of a show cause notice as follows: "[70] In the present case, the grounds in the 2017 Notice included Mr Lee not being a fit and proper person. However, as conceded by the respondent, particulars about which the Tribunal made some findings were not included in the notice. [71] We agree with the statement in Tosohn at [57] that a show cause notice issued under s 41 of the MDR Act must specify the grounds. Section 41(2) states: A show cause notice is a notice requiring a person to show cause why disciplinary action should not be taken against the person under this Act on the grounds specified in the notice. [72] The 'grounds' referred to in that section are set out in ss 38 and 39 of the MDR Act. They include that a 'person is not a fit and proper person to hold a license': s 38(1)(c). [73] At [20] and following of the Reasons, the Tribunal explained: (1) the "criteria for being a fit and proper person to hold a license" are specified in s 27(1). However this is an inclusive definition: s 27(4) MDR Act. (2) a request for a licence by a corporation must be refused under s 25(3)(b) of the MDR Act if the director (in this case Mr Lee) would have be prohibited from holding a licence because he was not a fit and proper person: see s 25(2)(b) MDR Act. (3) A request for a licence may otherwise be refused if a close associate is not a fit and proper person: s 25(5)(b) MDR Act. [74] Consequently, because Mr Lee was not a fit and proper person, the Tribunal was satisfied the appellant was not a fit and proper person and s 46 of the MDR Act required that its licence should be cancelled."
8. The Appeal Panel rejected the plaintiff's submission that the Tribunal was bound by the particulars of the grounds set out in the Third Show Cause Notice. It said at [77]: "In our view, there is no requirement in the MDR Act for the specification of particulars in a show cause notice, nor does the MDR Act indicate any intention that the enquiry about whether cause is shown in respect of specified grounds is to be limited to the particulars provided in the show cause notice."
9. The Appeal Panel reasoned from the proposition that there was no limitation on the submissions that might be made by the affected person (in [82]-[83]), that the Secretary was similarly free to adduce additional material. It concluded: "[89] It follows, subject to any issues of procedural fairness, the Secretary is not limited in taking disciplinary action to circumstances where the particulars specified in any show cause notice have been established. Rather, the Secretary may have regard to all relevant material in determining whether the grounds for taking disciplinary action have been established. [90] It is clear to us that the Tribunal, in review proceedings, is similarly confined to the grounds specified in the show cause notice but not the particulars in the show cause notice. [91] By s 63 of the ADR Act, the Tribunal "may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision": s 63(1) ADR Act. In doing so, the Tribunal is granted "the original depository's powers and discretion": Brian Lawlor Automotive Pty Ltd and Collector of Customs (New South Wales) 1 ALD 167 at 175. It is confined to reviewing the decision made and is not empowered to review a totally different decision: Secretary, Department of Social Security v Riley (1987) 17 FCR 99 at 105, Re Hare and Commissioner for Superannuation 2 ALD 233 at 236. [92] However, pursuant to s 63(1) of the ADR Act: the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law. [93] That is, the Tribunal is to have regard to any further factual material placed in evidence before it upon review." [Emphasis added.]
10. The Appeal Panel addressed the decisions of Sudath v Health Care Complaints Commission (2012) 84 NSWLR 474; [2012] NSWCA 171 (Sudath) and Sabag v Health Care Complaints Commission [2001] NSWCA 411 (Sabag) and distinguished s 43 of the Medical Practice Act 1992 (NSW) from s 41 of the Act in the present case. The Appeal Panel considered that the plaintiff was put on notice in the course of the hearing before the Tribunal that the Commissioner would rely on the additional matters which ultimately formed the basis of the Tribunal's decision and concluded that there had been no denial of procedural fairness.
11. The Appeal Panel said, at [123]: "We have no doubt that the evidence of Mr Lee concerning his convictions and the matters to which the appellant referred was being relied on by the respondent on all issues, not just the issue of credit. Further, the Tribunal made abundantly clear to the appellant that it would consider all relevant evidence in making the correct and preferable decision, and that the Tribunal did not consider itself confined to the matters in the show cause notice or in the determination."

The questions raised

1. The amended summons set out a considerable number of grounds of appeal. However, in substance, the appeal raises two questions, both of which involve questions of law. In these circumstances it is not necessary to reproduce or address separately each of the grounds set out in the amended summons. It is appropriate that there be a grant of leave to appeal having regard to the importance of the questions of law raised. I note that the Commissioner ultimately did not oppose the grant of leave.
2. The first question is whether, as the plaintiff contended, s 41, which operates as a mandatory precondition to the exercise of power by the Secretary, continues to operate and bind the Tribunal or the Appeal Panel when reviewing a determination by the Secretary under s 41. If the answer to the first question is yes, the appeal must be allowed, it being common ground that the basis on which the Tribunal disqualified the plaintiff, that he attempted to contradict statements in the police facts, deflected responsibility to others, made false declarations in an application for a motor repairer licence and was insufficiently candid in his responses to the Tribunal on these topics, was not contained in the Third Show Cause Notice.
3. If the answer to the first question is no, the further question arises whether the Appeal Panel Decision must be set aside on the grounds that the Tribunal, in making the findings against the plaintiff in the Original Decision, failed to accord the plaintiff procedural fairness.
4. In substance, the plaintiff submitted that, as the Tribunal stood in the shoes of the Commissioner (or Secretary), it had no greater powers than conferred on the Secretary by s 41. On this basis the plaintiff argued that the Tribunal was prohibited from taking disciplinary action unless the basis for the disciplinary action was contained in a show cause notice.
5. In the alternative, the plaintiff submitted that even if the Commissioner, and the Tribunal, were not bound by the Third Show Cause Notice, there was a denial of procedural fairness in the way in which the matter which ultimately formed the basis of the Original Decision was raised, which vitiated the Original Decision. Mr Young, who appeared on behalf of the plaintiff, submitted that there was no particularisation of the additional matters relied upon and that, accordingly, the plaintiff did not know what was actually alleged against him. Mr Young relied on the errors made by the Appeal Panel concerning the type and gravamen of the Hornsby convictions as evidence of the dangers of proceeding without any such particularisation.
6. What procedural fairness requires depends on the circumstances. Disciplinary cases give rise to particular issues because of the nature of the consequences for the licence holder, or practitioner as the case may be. Where a criminal conviction is relied upon as the basis for an allegation of bad character (or, more usually, that the person is not fit and proper to hold the relevant licence or practise in the profession), this opens up an inquiry into the person's character. Where the underlying conduct which gave rise to the conviction is relied upon, the person affected is entitled to adduce evidence as to whether the particular conduct occurred or to place it in context: Sudath at [49] (Basten JA) and at [102]-[104] (Meagher JA, Whealy JA agreeing). Where non-disclosure of convictions is relied on, the fact and circumstances of the conviction may also be relevant. In each of these instances, particulars are generally required in order that the affected person can appreciate on what basis the convictions are relevant.

The way in which the matter arose in the Tribunal

1. In the present case, the allegation made which related to Mr Lee's convictions was not referred to at all in the Third Show Cause Notice (which was the only operative one before the Tribunal). Nor did the documents, which the Commissioner purported to provide in accordance with s 58 of the ADR Act, include any documents which related either to the Hornsby convictions or to the plaintiff's application for a motor repairer licence (which did not disclose the Hornsby convictions).
2. As outlined above, the Hornsby convictions first arose on 24 July 2017, the penultimate day of the evidence before Senior Member Dinnen, when Mr Lee referred to them in answer to the proposition put by Ms Case that he would not generally tell lies where there was a legal consequence (tr. 74.40-75.1, set out above). The topic was then further explored in cross-examination on 28 July 2017, the final day of evidence. Mr Sheller conceded that it would not have been open to the Commissioner to rely on the Hornsby convictions on the issue of whether the plaintiff was a fit and proper person had Mr Lee not answered Ms Case's question in that way. However, Mr Sheller submitted that, once Mr Lee had referred to the convictions in that answer, the Commissioner was entitled to use the Hornsby convictions notwithstanding that the Commissioner had chosen not to proceed on the Second Show Cause Notice, which had relied on their non-disclosure.
3. Mr Sheller accepted that the Appeal Panel's analysis in [77] was incorrect because it would defeat the purpose of a show cause notice if all that was required was a bald statement of one or more of the grounds set out in ss 38 or 39 of the Act. I understood him also to accept that the words in s 41(4), "in respect of the matters to which the notice relates", implicitly required a degree of particularity in the notice in order that the affected person's response could be directed at the matters considered by the Secretary to require cause to be shown. Indeed, Mr Sheller submitted orally that "a show cause notice must provide sufficient information to enable someone to answer it".
4. However, Mr Sheller submitted that the contents of the show cause notice did not delineate all of the matters which the Tribunal was permitted to take into account. He contended that additional matters raised in the course of the hearing could be relied upon by the Commissioner, if adequate notice was given to the affected person, since s 41 did not confine the Tribunal or the Appeal Panel, but only the Secretary. He submitted that a show cause notice was, in effect, the beginning of the process but not its end.

Whether s 41 binds the Tribunal

1. The first issue is one of statutory construction. Before turning to s 41 itself, it is instructive to consider the authorities concerning the approach to be taken to statutory requirements for procedural fairness.

Smith v NSW Bar Association

1. In Smith v NSW Bar Association (1992) 176 CLR 256; [1992] HCA 36, the NSW Bar Association commenced proceedings in the original jurisdiction of the Court of Appeal seeking that Mr Smith's name be removed from the roll of barristers. Mr Smith gave evidence before the Court of Appeal. The Court of Appeal found that he had lied in his evidence and took this finding into account in deciding that he was guilty of professional misconduct and ought be removed from the roll. The High Court reversed the decision on the basis that the barrister had not been given notice that the court's finding would, or might, be made or that the finding would be used against him in that way.
2. In a joint judgment, Brennan, Dawson, Toohey and Gaudron JJ said at 269 that procedural fairness required that the allegation of deliberate lying be made and that the barrister be given an opportunity to respond to it. Deane J said at 270: "Disciplinary proceedings against a legal practitioner are primarily directed towards the protection of the public and not the punishment of the legal practitioner. Nonetheless, a court or other tribunal entertaining such proceedings is bound to observe the requirements of procedural fairness before making or acting upon any finding of misconduct. Two of those requirements in such proceedings are relevant for present purposes. The first is that the allegations against the particular practitioner must be specifically identified. The second is that the practitioner must be afforded an appropriate opportunity of being heard in relation to them." [Footnotes omitted and emphasis added.]

Walsh v Law Society of New South Wales

1. In Walsh v Law Society of New South Wales (1999) 198 CLR 73; [1999] HCA 33 (Walsh), the High Court considered the legislative scheme for disciplinary action against legal practitioners. In Walsh, the Law Society appealed to the Court of Appeal against the dismissal of two complaints made against Walsh, a solicitor. Instead of conducting the appeal, as it was obliged to, under s 75A of the Supreme Court Act 1970 (NSW), the Court of Appeal went beyond the complaints formulated and particularised against the solicitor and addressed the question of his good name and character and fitness to remain on the roll.
2. The majority (McHugh, Kirby and Callinan JJ) summarised the provisions from the Legal Profession Act 1987 (NSW) as follows at [61]: "In this scheme of discipline, a number of protections are included for the legal practitioner brought before the Tribunal. Proceedings may only be instituted 'with respect to a complaint' by 'an information laid by the appropriate Council or the Commissioner' in accordance with Pt 10 of the Act. The function of the Tribunal is confined to that of conducting a hearing 'into each allegation particularised in the information'. The Tribunal has certain powers of amendment to vary the information laid against the legal practitioner, for example, to permit the inclusion of additional allegations where that is justified. For the purpose of a hearing into a question of professional misconduct, the Tribunal 'is to observe the rules of law governing the admission of evidence'. In other hearings, the Tribunal is not so bound but may inform itself of any matter in such manner as it thinks fit."
3. It continued at [62]: "Given the scheme of the legislation, and the introduction of new statutory bodies for the task of discipline of members of the legal profession formerly conducted by professional bodies and by the Supreme Court, the requirements of particularity contained in the Act (and the safeguards thereby introduced for the practitioner concerned) would not be narrowly construed." [Emphasis added.]

SAAP v Minister for Immigration and Multicultural and Indigenous Affairs

1. In SAAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 294; [2005] HCA 24 (SAAP), the High Court considered the effect of s 424A of the Migration Act 1958 (Cth) in the context of an application for review by the Refugee Review Tribunal of the refusal by the Minister's delegate to grant a protection visa to the appellant. Section 424A(1) required the Tribunal to give the applicant particulars of any information that the Tribunal considered would be the reason, or part of the reason, for affirming the decision under review, to ensure, as far as reasonably practicable, that the applicant understands why it is relevant, and to invite the applicant to comment on it. Section 424A(2) provided that the information and invitation had to be given by a prescribed method, involving handing, or sending, to the applicant, by post or other specified form of communication, a document.
2. The relevant particulars were given orally in the hearing before the Tribunal. The appellant argued that the Tribunal's decision was invalid because of the failure to comply with s 424A. The Minister argued that because the particulars had been given orally at the hearing, there was no failure to accord procedural fairness.
3. The majority (McHugh, Kirby and Hayne JJ, Gleeson CJ and Gummow J dissenting) held that s 424A operated throughout the review conducted by the Tribunal and that it was not spent once the Tribunal had invited an applicant to appear before it to give evidence and make submission pursuant to s 425. The majority held that particulars, including particulars of the information obtained from the evidence of the elder daughter and of the invitation to comment, were required to be given in writing. Their Honours concluded that the Tribunal's failure to comply with s 424A constituted jurisdictional error and rendered its decision invalid.
4. The minority held that the non-compliance with s 424A(2) did not invalidate the decision and that procedural fairness had been complied with.

Sabag v Health Care Complaints Commission

1. In Sabag, the Health Care Complaints Commission (HCCC) brought a complaint against Dr Sabag in the Medical Tribunal alleging that he had carried out nerve block procedures without necessary safeguards, had incorrectly claimed for procedures and had failed to keep adequate patient records. Prior to the hearing, Dr Sabag had maintained that he had carried out nerve block procedures as claimed in the forms submitted to Medicare. However, during the hearing in the Medical Tribunal, Dr Sabag argued that he had not carried out nerve block procedures, but rather that he had administered injections to muscles near the site where his patients had reported pain. Although the HCCC did not amend the particulars of the complaint to accommodate Dr Sabag's new stance, it argued that Dr Sabag was incompetent to carry out the new procedures which he contended that he had conducted. The Tribunal made findings in accordance with the HCCC's final submissions.
2. The Court of Appeal (Sperling J, Beazley JA and Davies AJA agreeing) allowed Dr Sabag's appeal on the ground that the Tribunal had misunderstood the evidence. A majority (Sperling J, Beazley JA agreeing) would also have allowed the appeal on the ground that the appellant had been denied procedural fairness in that the allegations that he was incompetent and misled community agencies were neither notified to the appellant, nor litigated. The matter was remitted to a differently constituted Tribunal.

Frugtniet v Australian Securities and Investments Commission

1. In Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; (2019) 93 ALJR 629 (Frugtniet), the High Court allowed an appeal from the Full Federal Court. The Court unanimously held that the Administrative Appeals Tribunal (the AAT) was not entitled to take into account spent convictions in reviewing a decision of the Australian Securities and Investment Commission (ASIC) since ASIC itself was not permitted to take into account such spent convictions. The majority (Bell, Gageler, Gordon and Edelman JJ) reasoned that the AAT's jurisdiction was to stand in the shoes of the decision-maker whose decision was under review in order to determine for itself, on the material before it, the decision which can and should be made in the exercise of the power conferred on the primary decision-maker. Thus, the majority held that the AAT's exercise of power was subject to the same constraints as those applying to the primary decision-maker.

The construction of s 41

1. Statutory provisions are to be construed in such a way as to promote their purpose: s 33 of the Interpretation Act 1987 (NSW). It is plain from the terms of s 41 that its purpose is to give the recipient notice of allegations made and an opportunity to respond. In order for the notice and opportunity to be other than worthless, it is necessary that there be some particularity to the allegations. This requires not only specification of the ground or grounds (such as those contained within ss 38 or 39) but also the provision of sufficient particulars to enable the recipient of the notice to respond in a meaningful way.
2. The decision-maker under s 41 (the Secretary, or delegate, in this case, the Commissioner) is prohibited by s 41(5) from imposing any disciplinary action on a person such as the plaintiff unless the person has been given a show cause notice and the Secretary has considered submissions made in accordance with the show cause notice. Although the Tribunal has access to the oral evidence and documents tendered in the hearing, it is bound by the constraints, including s 41(5), on the original decision-maker because it stands in the shoes of the original decision-maker (Frugtniet). Thus, it may not impose disciplinary action on the plaintiff on a particular basis unless the plaintiff has been given a show cause notice which identifies that basis by specifying the ground in s 38 or 39 and setting out the allegations. If s 41 is construed so as not to require the relevant show cause notice to include the matter on which the disciplinary action is ultimately imposed, the constraint in the section is rendered nugatory.
3. As referred to above, Mr Sheller conceded that the Third Show Cause Notice did not contain the allegations which formed the basis on which the Tribunal found that the plaintiff was not a fit and proper person and imposed disciplinary action. Thus, the Tribunal failed to comply with s 41. Its decision is therefore erroneous as a matter of law. The Appeal Panel ought to have set it aside and was in error in failing to do so. Accordingly, the appeal to this Court ought be allowed.

Whether there was a denial of procedural fairness

1. Although I am satisfied that the Appeal Panel Decision must be set aside as it was an error of law for it to consider the further matters raised when they were not alleged in the Third Show Cause Notice, it is desirable, although not strictly necessary, to address the second basis for the appeal.
2. In substance, procedural fairness at common law requires the person affected to be given notice of the case the person has to meet. Whether there has been a denial of procedural fairness is a matter of "practical injustice": Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [37]-[38] (Gleeson CJ).
3. Although the Hornsby convictions could only ever be relevant to the ground in s 38(1)(c) of the Act, the convictions were potentially relevant on five separate bases: first, that the convictions per se had the effect that Mr Lee was not a fit and proper person to hold a motor dealer licence; secondly, that conduct underlying the convictions had that effect; thirdly, that the plaintiff's non-disclosure of the convictions on its application for a motor repairer licence in September 2015 had the effect that the plaintiff was not a fit and proper person to hold a motor dealer licence; fourthly, that Mr Lee's attitude to the convictions or the non-disclosure meant that he was not a fit and proper person; or, fifthly, that any of the above matters adversely affected Mr Lee's credibility as a witness in the proceedings before the Tribunal.
4. The plaintiff was not aware that the Commissioner would be relying on either Mr Lee's prior convictions; the underlying conduct; or his attitude to those convictions until 28 July 2017, the final day of the hearing of the evidence. Up until that time, the Commissioner had neither referred to them, nor had evidence been adduced in respect of them, apart from Mr Lee's answer on 24 July 2017, when he appears to have apprehended that Ms Case was asking him about them. The plaintiff knew, however, that the Commissioner was aware of the Hornsby convictions, since the non-disclosure of the convictions had been the subject of the Second Show Cause Notice, which had not been proceeded with. The plaintiff can also be taken to have been aware, first, that the Commissioner chose not to include Mr Lee's convictions or the plaintiff's non-disclosure of such convictions in the Third Show Cause Notice, which was the subject of the proceedings in the Tribunal; and, secondly, that the Commissioner did not consider them to be relevant to the determination since no documents relating to them had been served under s 58(1)(b) of the ADR Act.
5. Because the Tribunal purported to take into account the convictions (the correctness of which will be addressed further below) on the question of Mr Lee's character, it was in error in stopping Mr Lee from giving evidence about the circumstances underlying the convictions: Sudath at [49] (Basten JA) and at [102]-[104] (Meagher JA, Whealy JA agreeing). The Tribunal was also in error in misapprehending the legal standing of police facts, which could not be inferred to form the basis for the convictions, there being no evidence that they were agreed or as to their use, if any, in the proceedings before the magistrate at the Hornsby Local Court.
6. These matters, though amounting to errors of law, are subsidiary to the main issue: to what extent did there need to be any formal notification to the plaintiff of what was to be relied on by the Commissioner in addition to the allegations in the Third Show Cause Notice and for what purpose that further material was to be relied upon.
7. At the very least, the plaintiff was entitled to know whether Mr Lee's convictions and response to them were to be relied upon solely on credit, or whether they were to be relied upon on the issue of his fitness, as a close associate of the plaintiff's or in any of the possible ways set out above. It is highly undesirable that the demarcation between credit and issue changed throughout the hearing. At various instances, the plaintiff was assured by Ms Case and also by Senior Member Dinnen that matters would only be taken into account on credit. However, at other points, Ms Case informed the plaintiff's legal representative and the Tribunal that they would also be relied upon on the issue of fitness. Senior Member Dinnen appeared to elide the distinction between fitness (an issue in the proceedings) and credit, at one point intimating, erroneously, that they were, in the circumstances of the present case, the same thing: cf. Walsh. Mr Sheller frankly conceded that the indication of the basis on which the evidence would be relied upon "chopped and changed".
8. I reject Mr Sheller's submission that once Mr Lee had "raised" his convictions in cross-examination, the Commissioner was entitled to rely on them for all purposes (the issue and Mr Lee's credit) as long as it told the Tribunal and the plaintiff that it would rely on them for that purpose. It is plain from the transcript that Mr Lee raised the convictions because he thought that Ms Case was asking him about them. They were not raised by him in any exculpatory way but rather, by way of anticipatory self-defence, Mr Lee having been presumably warned that the Commissioner was aware of them, since they had been the subject of the Second Show Cause Notice. The present case is to be distinguished from Sabag where the practitioner had made a deliberate forensic choice to contest the allegations in a fundamentally different way in the Tribunal.
9. Further, procedural fairness, in my view, required that the plaintiff be given particulars of the additional matters relied on. It is not appropriate that a licence holder such as the plaintiff be required to guess from oral or written submissions what allegations are made against it. Unlike in the cases referred to above, which concern disciplinary proceedings in the medical and legal professions, the legislative regime under the Act makes no provision for a formal document, other than a show cause notice, to be given to the affected person. This is because the legislature has chosen to adopt a different model: namely, that there be a show cause notice, followed by a determination, which is then subject to administrative appeal in the Tribunal. In disciplinary proceedings against medical and legal practitioners, the legislature requires an "information" or "complaint" or other formal document, which initiates proceedings on behalf of the decision-maker, and which can, if legislative provisions authorise it, be amended after the commencement of disciplinary proceedings.
10. I reject the Commissioner's argument that Sabag stands as authority for the proposition that, as long as a matter has been litigated, procedural fairness has been accorded. In Sabag, Davies AJA (who dissented on this issue) considered that the appellant had not been denied procedural fairness because the issues of his incompetence and his conduct in misleading agencies had been sufficiently litigated. However, the majority considered that, although the matter had been squarely raised by Dr Sabag in the hearing, there was nonetheless a denial of procedural fairness as it had not been notified to him that the HCCC would rely on these matters as professional misconduct.
11. In the present case, the further allegations made against the plaintiff were never particularised. I do not regard the submissions made by the Commissioner to the Tribunal as sufficient to amount to particulars. They were, in any event, served after the evidence had been closed. It is no answer to this to say that the plaintiff could have applied for leave to re-open.
12. Although the errors made by the Appeal Panel as to which licence application the non-disclosure of convictions related to and as to which statute created the offence could be regarded as errors of fact, they are symptomatic of the difficulties that arise in the absence of a statement of particulars (whether by way of a show cause notice or otherwise in a separate document) setting out the basis or bases on which the Commissioner alleged that the Determination was correct. I am satisfied that the decision of the Tribunal was vitiated by a lack of procedural fairness and that the Appeal Panel was in error in dismissing the appeal. The Appeal Panel Decision is the operative decision and must be set aside. The Original Decision must also be set aside except in so far as it sets aside the Determination.
13. Mr Sheller invited me to make findings about what was required to achieve procedural fairness, in the event that I found that what had occurred amounted to a denial of procedural fairness. I am not persuaded that it is appropriate that I do so in the circumstances of the present case. First, having decided that s 41 bound not only the Secretary but also the Tribunal and the Appeal Panel, the question is moot. Secondly, the denial of procedural fairness in the present case is fact-specific. It would be highly artificial in these circumstances to express a view on whether, for example, the furnishing of a statement of particulars in advance of a hearing before the Tribunal, or before the Commissioner's case in the Tribunal in support of the disciplinary action the subject of a determination under review, would, but for s 41, fulfil the requirements of procedural fairness.

Conclusion

1. By reason of my conclusion that the Tribunal and the Appeal Panel are bound by s 41, there is nothing to remit to the Tribunal since the matters which formed the basis of the Original Decision and the Appeal Panel Decision were not within the allegations in the Third Show Cause Notice.

Costs

1. The parties agreed that there was no reason why costs ought not follow the event in accordance with the general rule under Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

Orders

1. For the reasons given above, I make the following orders: 1. Grant leave to appeal against the decision of the Appeal Panel. 2. Appeal allowed. 3. Set aside the decision of the Appeal Panel made on 31 May 2019 and the decision of Senior Member Dinnen on 27 July 2018, except in so far as Senior Member Dinnen set aside the determination of the Commissioner dated 14 March 2017. 4. Order the defendant to pay the plaintiff's costs of the proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 March 2020