Gilbert v Commissioner for Fair Trading

The Issues

1. The issue to be determined is whether the decision to refuse to grant the Applicant's application to renew his contractor licence is the correct and preferable decision. This requires consideration of whether the Applicant is a fit and proper person to hold a contractor licence under the Act.

Background

1. The parties have provided an agreed statement of facts from the matter NSW Fair Trading v Christopher Andrew GILBERT. The agreed statement of facts, which is dated 27 October 2014, sets out the background and details of the offences that formed the basis of the reasons for the determination that is the subject of this application. In those agreed facts the Applicant in these proceedings is referred to as the Defendant. It was agreed that: Offences: 1. Section 47A(1) Motor Dealers Act 1974 (NSW) 'Interfere with Odometer' (x12) 2. Section 192E(1)(b) Crimes Act 1900 (NSW) 'By Deception Obtains a Financial Advantage' (x5) 3. Section 178BA(1) Crimes Act 1900 (NSW) 'Obtain Benefit by Deception9 (x4) Background: The Motor Dealers Act 1974 (NSW) relates the Motor Dealer Industry in NSW with the primary aim of consumer protection. Strict obligations imposed upon Licensees to sell motor vehicles in a roadworthy and safe condition, with a statutory warranty (where applicable), and, guarantee the 'title' of the vehicle. Carsales.com Ltd is the owner and operator of a popular internet website known as 'carsales.com.au' ('Carsales'). Carsales main business is the sale of online classified advertisements to vendors for the sale of motor cars, motorbikes, boats, caravans, trucks, farm, construction and general goods to consumers. Facts: In early 2011 NSW Fair Trading commenced an investigation into the Defendant's alleged odometer interference and creation of false motor vehicle service histories (log book records). Modus Operandi: The Defendant; • purchases late model motor vehicles (predominantly Japanese Brands and in his own name) via Motor Vehicle Auction Houses, Motor Dealers and by private sales; • arranged for an electronic device to be used to reduce the true mileage recorded on the odometer; • obtains a new copy of the applicable Motor Vehicle Service Log Books from a Dealer; • caused a Dealer Stamp Service Stamp to be used to create a false service history to be consistent with the altered and false reduced odometer reading; • offers the vehicle for sale on 'CarSales' falsely stating in the advertisement the reduced mileage and false service history; and, • makes representations to prospective purchasers that he knew was false by stating the false service history and altered odometer mileage was true and correct. Court Attendance Notice 2 - 'Interfere with Odometer' (x1 +11 on Form 1) Using an electronic device the Defendant purchased on the internet he unlawfully interfered with the true odometer reading of 12 motor vehicles to display a greatly reduced 'mileage'. ... Section 47A(4) Motor Dealers Act 1974 (NSW) provides; If in proceedings for an offence under subsection (1) is it proved that the defendant had possession of the motor vehicle and that, during the time it was in the possession of the defendant, or shortly after the time it ceased to be in the possession of the defendant, the odometer reading was less than the odometer reading at the time the defendant acquired possession of the vehicle, it shall be presumed, in the absence of proof to the contrary, that the defendant interfered with the odometer of the vehicle. Court Attendance Notice 34 - 'Fraud Offences' (x1 + 10 on Form 1) In an 18 month period between 1 July 2009 and 1 January 2011 the Defendant purchased 11 late model motor vehicles (predominantly Japanese Brands and in his own name) via Motor Vehicle Auction Houses, Motor Dealers and by private sales. He transferred the motor vehicle registration details into his own and parent's names and at the time of transfer also completed a registration number 'plate swap' to disguise the vehicle and its true history from prospective purchasers and regulators. The Defendant used an electronic device he purchased on the internet to interfere with the motor vehicle odometer reading greatly reducing the true mileage recorded on the speedometer. He also obtained a new copy of the applicable Motor Vehicle Service Book from a Dealer and using a false Dealer Stamp Service Stamp he created a false service history consistent with the altered reduced odometer reading to be recorded within the Service Booklet. The Defendant offered the 11 motor vehicles for sale on 'CarSales' falsely stating in the internet advertisement the reduced mileage and false service history. Prospective purchasers responding to the Carsales advertisements were invited to attend the Defendant's parent's address situated at 59 Balintore Drive, Castle Hill, NSW, to view the vehicle offered for sale. The Defendant made representations to prospective purchasers that he knew at the time were false and dishonest regarding his ownership of the vehicle; its usage and condition; its service history and mileage. The Defendant received a financial advantage from the purchasers of the vehicles as a result of his deception. Had the purchasers known at the time when the Defendant made his false and dishonest representations (e true mileage, usage and condition, service history, etc) they would not have purchased the motor vehicle from the Defendant. Compensation: Pursuant to section 47B Motor Dealers Act 1974 (NSW) ('Recovery of portion of sale price'), where the Defendant has been convicted of an offence under s.47A(1), a purchaser, who when purchasing the motor vehicle relied upon the interfered reading on the odometer, may sue and recover from the Defendant as a debt due to the purchaser, an amount determined by the 'convicting' Magistrate as being the difference between the sale price of the vehicle and its fair value at the time of the sale. Alternatively, in the absence of a 'purchaser's 47B application' the prosecution seeks an order for the payment of compensation made payable to the consumers under section 55B(2)(c) Motor Dealers Act 1974 (NSW). Particulars of the compensation are attached and marked as annexure 'B'. Antecedents: Not previously known to NSW Fair Trading. 14 November 2004 Conviction for Receiving / Disposal of Stolen Property >$5000.00 - Fine $300. Penalties: 'Interfere with Odometer' s.47A(1) Motor Dealers Act 1974 (NSW) Local Court Max 100 Penalty Units ($11,000 - s.55(1B)MDA) 'By Deception Obtains a Financial Advantage' s.192E(1)(b) Crimes Act 1900 (NSW) Table 1-2 years imprisonment /100 Penalty Units 'Obtain Benefit by Deception' (x4) s.178BA(1) Crimes Act 1900 (NSW) Table 1 - 2 years imprisonment /100 Penalty Units Professional costs: $3500.00

Other material before the Tribunal

1. The Applicant relies on his own evidence. He provided two affidavits and also attended the hearing and gave evidence. Ms Linda Needham provided a letter of reference in support. The Applicant also relies on a reference from Mr Graham Stewart, Senior Portfolio Manager with Chadwick Real Estate.
2. Mr Perla also provided written submissions in support of the Applicant's case.
3. The Respondent relies on a bundle of material filed pursuant to section 58 of the Administrative Decisions Review Act 1997. This bundle contains a copy of the determination and the material relied on by the Respondent in making the determination. Mr Maynard provided written submissions in support of the Respondent's case.
4. Both Mr Perla and Mr Maynard made oral submissions.

Applicable legislation

1. There is no dispute between the parties in regard to the applicable law.
2. Section 28(1) of the Civil and Administrative Tribunal Act 2013 provides: 28 Jurisdiction of Tribunal generally (1) The Tribunal has such jurisdiction and functions as may be conferred or imposed on it by or under this Act or any other legislation.
3. Section 83B of the Act provides: 83B Administrative reviews by Tribunal (1) An applicant for the issue, alteration, renewal or restoration of an authority aggrieved by any decision of the Secretary relating to the application may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the decision. ...
4. The hearing of this matter is a hearing de novo, and the Tribunal is entitled to take into account material before it, including material that was not before the primary decision maker.
5. Section 40(1) of the Act provides that the requirements for the issue of a licence also apply to the renewal of a licence.
6. Section 20(1) of the Act provides: 20 Issue of contractor licences (1) The Secretary must refuse an application for a contractor licence if: (a) the Secretary is not satisfied that the applicant is a fit and proper person to hold a contractor licence, or ... (1A) Without limiting subsection (1) (a), in determining whether an applicant is a fit and proper person to hold a licence the Secretary is to consider whether the applicant is of good repute, having regard to character, honesty and integrity. …

Fitness and propriety

1. This expression has been considered in numerous matters in this Tribunal and in other jurisdictions. Assessment of whether a person is fit and proper to be the holder of a licence is different from, but related to, an assessment of whether a person is of good character.
2. The Appeal Panel of the Administrative Decisions Tribunal said in Director General, Transport NSW v AIC (GD) [2011] NSWADTAP 65 (23 December 2011), the concepts of "good repute" and "fit and proper person" involve different considerations. "The former concept goes to the way in which a person is regarded by others in the community ... while the latter concept goes to an individual's intrinsic characteristics, whether they are known to others or not".
3. The concept of 'fit and proper' takes its colour from its statutory context and a person's fitness is to be gauged in the light of the nature and purpose of the activities that the person will undertake. In Hughes and Vale Pty Ltd v New South Wales (No. 2) [1955] HCA 28; (1955) 93 CLR 127 the High Court said (at 156-7): "The expression 'fit and proper' is of course familiar enough as traditional words when used with reference to offices and perhaps vocation. But their very purpose is to give the widest scope for judgment and indeed for rejection. 'Fit' (or 'idoneus') with respect to an office is said to involve three things, honesty, knowledge and ability ... When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and that it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances."
4. The 'fit and proper' test applied in the Act is of broad application. The discretion vested in a decision maker in determining whether a person is fit and proper, in any given context, was said by the Full Court of the Federal Court in Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 589 at 389, per Northrop, Miles and French JJ, to "give wide scope for judgement and allow broad bases for rejection.
5. In Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321,Chief Justice Mason explained that, at 380: 'The question whether a person is fit and proper is one of value judgment. In that process the seriousness or otherwise of particular conduct is a matter for evaluation by the decision maker. So too is the weight, if any, to be given to matters favouring the person whose fitness and propriety are under consideration.'
6. Toohey and Gaudron JJ said at 380: "The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question."
7. In Sobey v Commercial and Private Agents Board (1979) 22 SASR 70 Walters J said: "In my opinion what is meant by that expression is that the Applicant must show not only that he is possessed of a requisite knowledge of the duties and responsibilities devolving upon him as the holder of a particular licence ... but also that he is possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public ... as a person to be entrusted with the sort of work which the licence entails."

The Applicant's case

1. The Applicant provided an outline of his background and experience. His evidence is that he works as a sole trader mainly carrying out residential work in the North shore area of Sydney. His largest client has been Chadwick Real Estate ("Chadwick"). He stated that he has never received any complaint for any work that he has completed for Chadwick.
2. In relation to the Applicant's work for Chadwick, Mr Stewart wrote: Due to Christopher's high quality workmanship, professional attitude and honesty he has become a valued asset and the natural "go to" builder for all works big and small. Christopher made his criminal allegations known when it first arose in around 2012 and throughout the proceedings. Christopher was concerned in bringing any disrepute to the Business. We found this to be honourable and decided to consider his situation. In consideration of Christopher's situation the 2012 Guideline for the prevention of discrimination in employment on the basis of a criminal record was reviewed and we could not find any logical link between his allegations or later his convictions to his role as a first hand reference in representing our good name as a contractor throughout the North Shore. It has been noted that due to the article on the internet where clients check builder's licences, Christopher has lost a large percentage of his "word of mouth" clientele which makes up the majority of his business. I could continue on with glowing accounts of Mr Gilbert & his workmanship but will instead simply say that I trust & respect him greatly as a builder and as a person.
3. The Applicant stated that in fact he has never received any complaints in relation to any work he has undertaken whether as an employee or as a sole trader. I note that there is no evidence of any issues in regard to the quality of his workmanship.
4. It is not in dispute that the Applicant was convicted of a number of offences after pleading guilty. In relation to the offences, the Applicant stated that he has suffered from depression for several long periods during his life. In or around 2012 he was diagnosed with bipolar and anxiety disorder. He had suffered from these conditions for a long period leading up to this diagnosis. He did not receive any significant medical treatment for his mental health until mid-2015 when Dr Sachin Nair provided him with a mental health plan to manage his bipolar and anxiety disorder. He is still on this plan.
5. He stated that his mental health deteriorated to a significant extent between 2012 to mid-2015, during which time he was engaged in criminal proceedings relating to charges laid against him in 2011.
6. Ms Linda Needham provided a letter of reference in support of the Applicant's case. She also provided some detail in regard to the how he is affected by his mental condition and also about steps he took following his convictions. Ms Needham is a solicitor and is also the Applicant's partner. She wrote: I supported Chris through his legal proceedings in relation to his fraud charge. I witnessed the sincere and deep regret he had for his actions. This affected him deeply emotionally, psychologically, physically and financially. He became depressed and anxious and had difficulty functioning during this time. This effected his motivation to get up and go to work, which in turn affected his finances. He had little sleep and didn't not eat well or look after himself. I note that Chris was convicted 18 months ago in January 2015, and the offence occurred years ago. Christopher was sentenced to Community Service Order, and undertook a couple hundred hours of community service, using his skills as a carpenter at Cherrybrook school. He took his work at the school seriously, and worked hard, labouring physically. I understand that his service saved the school a large amount of money as they did not have to contract the work out. He completed a number of projects including re-roofing a hall, and took pride in being able to assist the school and community. Chris has been punished for his crime and made retribution through agreeing to pay $70,000 in compensation. These NCAT proceedings are extra-curial punishment for a man who deeply regrets and had been honest and forthcoming about his criminal behaviour from years ago, has paid his dues and made retribution, and desperately wants to move on with his life. I have no personal knowledge of whether or not he completed his CPD points as required. His mental health issues leave him at times depressed and unmotivated, unorganised leaving aspects of his life in a chaotic disarray, stressed, confused and he finds it difficult to cope with tasks. To manage and treat his mental health, I have assisted him to get enrolled into a Dialectical Behaviour Therapy (DBT) program at The Hills Clinic which starts on 1 August. He also has a referral to a BDT program at Westmead Hospital although the waitlist is about 18 months. I see Christopher as someone who places his integrity before anything else. I understand that he has a great reputation in the North Shore for his professionalism and the quality of his work. I understand that because of this, he is in very high demand, and the majority of his work comes from referrals from his previous clients. He is also a person of good character - he has helped me and many other people out of the kindness of his own heart, even to his own detriment. He is the most caring person I know, and goes out of his way to help his family and friends without being asked. For over a decade he has always been there for me when I am in need, and I consider him an honest and trustworthy person. I would trust him with my life.
7. The Applicant also gave evidence of an earlier conviction in relation to Receiving / Disposal of Stolen Property. He stated that it related to a mobile phone that he had bought. He was contacted by police a year later and told that the phone was stolen. He stated that was not aware that he had been convicted as he was convicted in his absence. He had paid the fine and had forgotten about it. As a result he had not declared the conviction on his application for a licence in June 2011.
8. In relation to steps that he has taken since his charges and convictions Mr Perla submitted that it is clear that the Applicant:

• pleaded guilty to the offences;
• was remorseful and wrote letters of apology to the persons affected, notwithstanding that this was not required by the order of the Court;
• completed his Community Service Order;
• made retribution through payment of $70,000 in compensation;
• disclosed the criminal proceedings to his then clients, and in doing so had a significant reduction in his client base;
• advised Chadwick of the offences and notwithstanding the Applicant's convictions he is still considered to be honourable. Mr Stewart stated that he continues to trust and respect him as a builder and as a person;
• has taken steps to address his mental condition. He is enrolled in a Dialectical Behaviour Therapy program at The Hills Clinic and is also on the waitlist for a program at Westmead Hospital.

1. Mr Perla further submitted that there is no evidence to suggest that the Applicant is likely to reoffend or be the subject of further complaints. The evidence supports a finding that the Applicant is remorseful for his actions and has sought to continue his business as a builder, whilst acting in an honest and open manner with his building clients.
2. He also submitted that the Applicant's failure to disclose his 2004 conviction on his 2011 application, some 7 years later should not be a relevant consideration.
3. He submitted that in the circumstances the Tribunal should therefore find that the Applicant is a fit and proper person to hold a contractor licence.

The Respondent's case

1. It is not in dispute that the Applicant was convicted of multiple charges of breaches of both the Crimes Act and Motor Dealer's Act, in relation to altering the odometers and creating a false service history for cars and then selling them. He was fined $70,000 and ordered to undertake 500 hours of community service.
2. The Respondent's case is essentially that by virtue of the convictions the Applicant was not a fit and proper person to hold the licence he is seeking. He must therefore establish that circumstances are now such that he can be regarded as fit and proper for that purpose. Mr Maynard submitted that the Applicant has not provided evidence of change in his character or conduct and therefore he remains unfit to hold the licence. He also submitted that while there is evidence regarding the Applicant's mental health, there is no evidence to show how the condition affected his conduct. Further, he submitted that if there was no link between the condition and the conduct, there is no reason to think that the treatment that he is now receiving would be relevant.
3. He also submitted that in the absence of such evidence, the conduct stands alone as serious dishonesty.

Discussion

1. I note and accept the evidence in regard to the Applicant's failure to disclose his 2004 conviction on his 2011 application. I agree that that failure should not be determinative of this matter.
2. The date of the convictions in relation to the offences is unclear. The Applicant has referred to having been convicted on 27 October 2014 whereas the Respondent referred to the date of the convictions as January 2015.
3. Nevertheless, it is noted in the agreed facts, the conduct that resulted in the Applicant's convictions occurred between 2009 and 2011. It seems that the most recent conduct was in January 2011.
4. There is no dispute that the offences are serious. The conduct continued for a period of some 18 months. I agree with Mr Maynard that at the time of those offences the Applicant could not have been regarded as a fit and proper person to hold the licence. The question to be considered is therefore whether that is still the case.
5. I note the Respondent's submission that there is no evidence to show how the Applicant's mental health might have affected his conduct at the time of the offences. I agree with that submission. However, as Mr Perla submitted, "the Applicant's criminal conduct fell in a period that was contributed to by his mental illness. Whilst that is no excuse, it provides some background to his actions".
6. Nevertheless, without further evidence I cannot be satisfied that there was a link between the Applicant's mental health and the offences. Put at its highest, I am satisfied that at the time of the offences the Applicant suffered a mental illness. On the basis of Ms Needham's letter I am satisfied that the Applicant's mental health issues "leave him at times depressed and unmotivated, unorganised leaving aspects of his life in a chaotic disarray, stressed, confused and he finds it difficult to cope with tasks". However, I note that there appears to be some inconsistency between the symptoms that Ms Needham identified and the fact that the Applicant was able to engage in the complex conduct that was involved in the offences as described in the agreed statement of facts.
7. In my view the Applicant's conduct since the time of the offences is crucial to determining whether he is now a fit and proper person to hold the licence.
8. It is clear that the Applicant is highly regarded in the field in which he operates and that his work is of a high standard. However, as the relevant case law has noted, the way in which a person is regarded by others in the community is not the same concept as an individual's intrinsic characteristics.
9. In the context of the Act it is necessary to consider the Applicant's reputation by reference to his character, honesty and integrity.
10. Clearly his honesty was in doubt at the time of his offences. However, since that time he has shown remorse for his conduct. Ms Needham's letter provides a clear indication of how he dealt with the situation. He has demonstrated his remorse by the way in which he dealt with his clients and the fact that he wrote letters of apology to the persons affected by the offences. He chose to reveal his offences to his clients and exposed himself to the risks associated with that revelation. He accepted the consequences of his actions and carried out the orders of the court. He undertook community work and made paid $70,000 in compensation.
11. In these circumstances I am satisfied that the Applicant is of good repute, having regard to character, honesty and integrity.
12. While there is no independent evidence to show that there was a link between the Applicant's mental health and the offences, it is apparent that he is aware of the impact that his health has on his work and his broader life and has taken steps to address it.
13. It is my view that there is good reason to have confidence that the Applicant is unlikely to reoffend or be the subject of further complaints. That being the case I am satisfied that he is now a fit and proper person to hold the licence. Accordingly, his application for renewal should be granted.

Orders 1. The decision to refuse the Applicant's application to renew his contractor licence under the Home Building Act 1989 is set aside; 2. In its place the decision is made that the application is granted. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 October 2016