Haley v Commissioner of Fair Trading, Department of Finance, Services & Innovation

NCAT Administrative and Equal Opportunity|2016-10-17

dentified as [Not for publication], to the evidence given in private before the Tribunal and to the record of that part of the proceedings conducted in private pursuant to section 49 of the Civil and Administrative Tribunal Act 2013. That material is not to be released to either the Applicant or to the public.

REASONS FOR DECISION

The Applicant has sought review of a decision by the Commissioner for Fair Trading ("Fair Trading") under section 27(1)(a) of the Tattoo Parlours Act 2012 ("the Act"). Fair Trading determined to refuse to grant the Applicant an operator licence in relation to the Fat Tatts and Body Piercing parlour at Penrith ("the Parlour"). The Parlour is operated by Fat Tatts and Body Piercing Pty Ltd ("the Company"). The Applicant is the director of the Company.
A delegate of the Commissioner of Police ("the Commissioner") made an adverse security determination ("the ASD") in respect of the operator licence application under section 19(1) of the Act, finding that it would be contrary to the public interest for the licence to be granted. The delegate determined that: "a) it would be contrary to the public interest for the applicant to be granted the licence sought, for the reason that the applicant and the parlour have ongoing associations with the Rebels OMCG"

Applicable legislation

Section 9 of the Act provides: 9 Types of licences and authorisation conferred by licence (1) The following kinds of licence may be granted and held under this Act: (a) an operator licence, (b) a tattooist licence. (2) An operator licence authorises the licensee to carry on a body art tattooing business (whether on his or her own behalf or on behalf of another person) at the premises specified in the licence in accordance with this Act and the conditions of the licence. (3) A tattooist licence authorises the licensee to perform body art tattooing procedures in accordance with this Act and the conditions of the licence. …
Section 11 of the Act provides: 11 Licence applications ... (2) An application for a licence may only be made by an individual. ... (3) An application for an operator licence in connection with a body art tattooing business that is owned or operated by or on behalf of a corporation, partnership or trust must be made by an individual nominated by the corporation, partners or trustees to be the premises manager for the purposes of carrying on that business at the premises for which the licence is sought. … (5) An application for a licence must: … (b1) in addition to the statement required under section 12, be accompanied by copies of 3 forms of personal identification of an approved kind for each individual identified as a close associate in that statement, and (c) in the case of an operator licence: (i) specify the address of the proposed licensed premises, and (ii) specify the names and residential addresses of each staff member employed (or, if no staff members are currently employed, proposed to be employed) to work at the proposed licensed premises, and …
Section 4 of the Act defines a "close associate". It provides: 4 Meaning of "close associate" (1) For the purposes of this Act, a person is a "close associate" of an applicant for a licence or a licensee if the person: (a) holds or will hold any relevant financial interest, or is or will be entitled to exercise any relevant power (whether in the person's own right or on behalf of any other person), in the business of the applicant or licensee that is or will be carried on under the authority of the licence, and by virtue of that interest or power is or will be able (in the opinion of the Commissioner) to exercise a significant influence over or with respect to the management or operation of that business, or (b) holds or will hold any relevant position, whether in the person's own right or on behalf of any other person, in the business of the applicant or licensee that is or will be carried on under the authority of the licence, or (c) is or will be engaged as a contractor or employed in the business of the applicant or licensee that is or will be carried on under the authority of the licence. (2) For the purposes of this section, a financial institution is not a close associate by reason only of having a relevant financial interest in relation to a business. (3) The provisions of this section extend to relevant financial interests and relevant powers even if those interests and powers are not payable, exercisable or otherwise enforceable as a matter of law or equity, but are nevertheless payable, exercisable or otherwise enforceable as a matter of fact.
The expression "relevant financial interest" is defined as: "relevant financial interest" , in relation to a business, means: (a) any share in the capital of the business, or (b) any entitlement to receive any income derived from the business, or to receive any other financial benefit or financial advantage from the carrying on of the business, whether the entitlement arises at law or in equity or otherwise, or (c) any entitlement to receive any rent, profit or other income in connection with the use or occupation of premises on which the business is or is to be carried on (such as, for example, an entitlement of the owner of the premises at which the business is carried on to receive rent as lessor of the premises).
The expression "relevant position" is defined as: "relevant position" means: (a) the position of director, manager or secretary, or (b) any other position, however designated, if it is an executive position.
The expression "relevant power" is defined as: "relevant power" means any power, whether exercisable by voting or otherwise and whether exercisable alone or in association with others: (a) to participate in any directorial, managerial or executive decision, or (b) to elect or appoint any person to any relevant position.
Section 12 of the Act requires that an applicant is to provide information regarding each individual identified as a close associate. It states: 12 Statement as to close associates of applicant for operator licence (1) An application for an operator licence must be accompanied by a written statement in the approved form, made by the applicant, specifying: (a) that the applicant has made all reasonable inquiries to ascertain the information required to complete the statement, and (b) the following information about any close associates of the applicant: (i) if the associate is an individual-the individual's name and date of birth, (ii) if the associate is a proprietary company-the name and ACN of the company and the names of its directors and shareholders, (iii) if the associate is any other kind of corporation-the name of the corporation, its ACN or ARBN (if any) and the names of the directors or members of its governing body, (iv) if the associate is a partnership-the trading name of the partnership and the names of the partners (including any silent partners), (v) if the associate is a trust-the names of the trustee or trustees and, if a trustee is a proprietary company or other corporation, the information referred to in subparagraphs (ii) and (iii) concerning its management and shareholders. …
Section 14 of the Act provides that when Fair Trading receives an application for a licence it is to refer the application to the Commissioner for an investigation and determination as to either or both of the following: (i) whether the applicant is a fit and proper person to be granted the licence, (ii) whether it would be contrary to the public interest for the licence to be granted.
In regard to the Commissioner's role, section 19 provides: 19 Commissioner to make security determinations about applicants and licensees (1) If an application for a licence is referred to the Commissioner for investigation under section 14, the Commissioner is to inquire into and determine, and report to the Secretary on, either or both of the following: (a) whether the applicant is a fit and proper person to be granted the licence, (b) whether it would be contrary to the public interest for the licence to be granted. (2) The Commissioner may also investigate and determine, whether at the request of the Secretary or on the Commissioner's own initiative, either or both of the following and report to the Secretary on them: (a) whether a licensee continues to be a fit and proper person to hold his or her licence, (b) whether it would be contrary to the public interest for the licensee to continue to hold his or her licence. (3) For the purpose of making a determination on a matter referred to in subsection (1) or (2), the Commissioner may have regard to any criminal intelligence report or other criminal information held in relation to the applicant or licensee (or a close associate of the applicant or licensee) that: (a) is relevant to the business or procedures proposed to be carried on or performed, or carried on or performed, under the licence, or (b) causes the Commissioner to conclude that improper conduct is likely to occur if the applicant were granted the licence or the licensee continued to hold the licence, or (c) causes the Commissioner not to have confidence that improper conduct will not occur if the applicant were granted the licence or the licensee continued to hold the licence.
Section 16(3)(c) of the Act provides that Fair Trading must not grant the licence if the Commissioner has made an adverse security determination in respect of an applicant.
Section 20 of the Act provides that neither the Commissioner nor Fair Trading is required to give reasons for determining an application if to do so would disclose the existence or content of any criminal intelligence report or other criminal information as referred to in section 19 (3).
The Tribunal has jurisdiction pursuant to section 27 of the Act which provides: 27 Right to seek administrative review from Civil and Administrative Tribunal (1) A person (other than a controlled member of a declared organisation) may apply to the Civil and Administrative Tribunal for an administrative review under the Administrative Decisions Review Act 1997 of the following decisions: (a) the refusal or failure by the Secretary to grant a licence to the person (other than by operation of section 26 (1) (a)), (b) a condition imposed by the Secretary on a licence granted to the person, (c) the suspension or cancellation of a licence granted to the person. ... (3) If an application for a licence was refused or a licence was suspended or cancelled by the Secretary on the ground of an adverse security determination made by the Commissioner about the applicant for the administrative review: (a) the Commissioner (as well as the Secretary) is to be a party to any proceedings in the Civil and Administrative Tribunal for an administrative review of the decision of the Secretary, and (b) the Tribunal is to be provided with a copy of the report of the Commissioner's determination, and (c) the Tribunal is not prevented from determining whether the Secretary made the correct and preferable decision regarding the application or the licence concerned merely because of the determination of the Commissioner.
I have discussed the relevant aspects of the regime in several decisions and I have also considered the approach to be adopted when undertaking a review of a decision to refuse an application for a licence under the Act where the refusal is a result of an adverse security determination: see for example the discussion in Smith v Commissioner of Police & Anor [2014] NSWCATAD 184 ("Smith"). In Smith at paragraph [27] - [28] I expressed the view: 27. In my view section 27(3) of the Act is to be construed as giving the Tribunal the jurisdiction to make a fresh determination on the basis of the material placed before it. The Tribunal is not confined to the grounds relied upon by the Commissioner in making the adverse security determination. 28. The Tribunal may make its decision on any other lawful, discretionary basis. In doing so there is no need to revisit the adverse security determination. Pursuant to section 27(3)(a) of the Act the Commissioner is a party to the proceedings. The Commissioner is able to present material and argument in relation to the matter to be determined. The Commissioner is able to present criminal intelligence reports or other criminal information to the Tribunal and subsections 27(4), (4A) and (4B) of the Act provide safeguards in relation to that material.
This approach was accepted by the Appeal Panel in Austin v Commissioner of Fair Trading & Commissioner of Police [2016] NSWCATAP 179 at paragraphs [37] - [38].
In my view, in making its decision the Tribunal is entitled to have regard to and give weight to any material which the Commissioner was entitled to consider and give weight. This material might include relevant criminal intelligence report or other criminal information held in relation to an applicant or a close associate of an applicant. The relevant material can also include any material that has come into existence, or discovered, after the date of the Commissioner's decision: Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577.
The grounds for refusal available under the Act include, but are not limited to, grounds that the Applicant is not a fit and proper person, or that it is not in the public interest for the licence to be granted.
In the present matter, the Commissioner contends that the Tribunal should affirm the decision not to grant the Applicant the licences that she seeks. It submits that the Tribunal should find that it is not in the public interest for the licences to be granted.

The Issues in this matter

In the present case the issue to be determined is whether it would be contrary to the public interest for the operator licence to be granted.
The Applicant's fitness and propriety is not in issue. Rather the Commissioner's concerns relate to Mr Peet's involvement in the Parlour and his relationship to the Applicant and Kristy. The Commissioner is also concerned in relation to other individuals who have been engaged in the business of the Parlour.
The issues for determination are therefore based on the question as to whether or not Mr Peet and the others are, or were, close associates of the Applicant and, if so, whether for that reason it would be contrary to the public interest for the operator licence to be granted.

The public interest

The decision-maker is required to weigh up whether it would be contrary to the public interest for the licence to be granted. The Act does not define the expression "the public interest". Nor does it provide any guidance as to what considerations may be taken into account when determining whether the grant of an application would or would not be in the public interest. However, the primary focus of the Act is on the regulation of the tattoo industry and on the protection of the public from criminal gangs, other criminal elements and their activities.
When determining whether the grant of a tattoo licence would be contrary to the public interest, the discretion is broad. In regard to how the expression 'contrary to public interest' may be applied within the context of the Act, the Second Reading Speeches made when the Bill was introduced to Parliament make it clear that the intention of the Act is to reduce criminality within the industry, and to provide the community with confidence in a professional tattoo industry. Mr Anthony Roberts, Minister for Fair Trading, stated in his Second Reading Speech that: The bill does not seek to define or particularise the meaning of what would be against the public interest in this regulatory regime. It is deliberately broad to allow the police commissioner sufficient scope to get crime gangs out of this industry and keep them out. We trust that the Administrative Decisions Tribunal will keep this in mind when hearing any appeals against adverse determination. The public interest test is not intended to be focused on issues particular to the art of tattooing or to concern itself with the competence of those performing the service. It is designed to address the criminal matters currently surrounding the industry, such as extortion, money laundering, personal violence, firearms crime, illicit drug offences, arson and so on. Applicants who are part of this criminal world can and should be refused a licence on public interest grounds. … We know bikie gangs use "clean skins" - an apt term in the current context - to act as fronts for them in their businesses. These people are chosen precisely because they have no criminal record. However, if the commissioner has credible evidence of their links to bikie gangs, under this scheme he may refuse or revoke their licence.
The decision of whether it would be contrary to the public interest for the licence to be granted requires consideration of both public and private interests: See discussion in Mielczarek v Commissioner of Police, NSW Police Force (No 2) [2016] NSWCATAP 255 at paragraphs [15] - [28].
In Comalco Aluminium (Bell Bay) Ltd v O'Connor (1995) 131 ALR 657, 681 Wilcox CJ and Keely J said: "The purpose of the reference to public interest is to ensure that private interests are not the only matters taken into account; to make clear that the interests of the whole community are matters for the Commissioner's consideration. The effect of the reference is to amplify the 'scope and purpose' of the legislation".
The discretion to make a decision "in the public interest" is confined only by the scope and purpose of the legislation itself: O'Sullivan v Farrar [1989] HCA 61; (1989) 168 CLR 210, 216. Applying a public interest test is a question of fact and degree: Re Queensland Electricity Commission; ex parte Electrical Trades Union of Australia (1987) 72 ALR 1, 5.
In Director of Public Prosecutions v Smith [1991] VicRp 6; [1991] 1 VR 63, 75, the court held: The public interest is a term embracing matters, among others, of standards of human conduct and of the functioning of government and government instrumentalities tacitly accepted and acknowledged to be for the good order of society and for the well-being of its members. The interest is therefore the interests of the public as distinct from the interest of an individual or individuals.
The Appeal Panel pointed out in Commissioner of Police v Toleafoa [1999] NSWADTAP 9 at paragraph [25] that "The 'public interest' is an inherently broad concept giving the appellant the ability to have regard to a wide range of factors in choosing whether to exercise a discretion adversely to an individual".
It is also well settled that an applicant's personal interest in retaining a licence cannot outweigh the public interest in having full confidence in the professionalism of people involved in the relevant industry: Blisset v Commissioner of Police, New South Wales Police Service [2006] NSWADT 114 at paragraph [32].
The Appeal Panel explained in Constantin v Commissioner of Police, New South Wales Police Force (GD) [2013] NSWADTAP 16 at paragraph [33] that the 'public interest' allows for issues going beyond the character of the applicant to be taken into account. These may include concerns in relation to public protection, public safety and public confidence in the administration of the licensing system.

"Fit and proper person"

As noted, the Commissioner does not raised concerns in regard to the Applicant's fitness and propriety. However, it is reasonable to consider any concerns in regard to the fitness and propriety of any close associates.
I discussed the close associate provisions recently in Mielczarek v Commissioner of Fair Trading and Commissioner of Police, NSW Police Force [2017] NSWCATAD 5 ("Dawn Mielczarek's case").
I reviewed a number of relevant authorities that considered the meaning of the expression "fit and proper person" in Smith at paragraphs [38] to [41]. The assessment of fitness and propriety is a question of fact to be decided objectively in relation to the activities in which the applicant, if licensed, would be engaged. It has been held to involve three qualities, integrity, knowledge and ability (Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127 at 156 - 7.
In Sobey v Commercial and Private Agents Board (1979) 22 SASR 70, 75, Walters J stated: In my opinion what is meant by that expression is that the applicant must show not only that he is possessed of the requisite knowledge of the duties and responsibilities evolving 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.
As Senior Member Walker noted in Mielczarek v Commissioner of Police and Commissioner for Fair Trading [2016] NSWCATAD 34 ("Sasha Mielczarek's case"), in the context of the Act, unfitness can be indicated by criminal associations, habitual recidivism, formal or informal links with OMCGs, failure to implement proper tattooing practices and general disregard for the law.
Factors relevant to fitness and propriety include the nature, seriousness and frequency of any criminal offences for which the applicant has been arrested or convicted; the applicant's reputation in the community; and the likelihood that the applicant will reoffend, be the subject of further complaints or commit further offences. Assessing an applicant's fitness and propriety is thus an evaluative process that gives the decision-maker wide scope for judgment and allows broad bases for rejection.
In Zahra v Commissioner of Police NSW Police Force & NSW Fair Trading [2014] NSWCATAD 211 I observed at paragraph [65] - [66]: 65. On the material before me I am satisfied that the Rebels are recognised as an organised crime network and that the club poses a significant threat to the public interest. 66. It is clear that the Act establishes a regime that is intended to remove the influence of outlaw motorcycle gangs from the industry. In my view, the Applicant's continued involvement with the Rebels provides an opportunity for the Rebels to exercise a significant influence over the Applicant's business and a reason to be involved in the industry in order to benefit the Applicant's business. This is not in the public interest or in the interest of the industry.
Senior Member Walker adopted this view in Sasha Mielczarek's case.

"close associate"

In the present matter, the Commissioner's delegate determined under section 19(1) of the Act that it would not be in the public interest for the Applicant to be granted the operator licences. The Delegate came to that view having regard to information concerning the Applicant's former partner Mr Nicholas Peet. The Applicant and Mr Peet have a daughter Kristy Haley ("Kristy"). Kristy occasionally works at the Parlour and in the past she has been a director and shareholder of the Company and involved in the management of the Parlour.
The Commissioner contends that Mr Peet was a close associate of the Applicant when the Applicant applied for an operator licence in August 2013. Mr Peet is a former member of the Rebels Outlaw Motorcycle Gang ("the Rebels"). His evidence is that he has not been associated with the Rebels since 2013. He was not cross-examined on that evidence.
The Commissioner has provided information relating to the Company that was extracted from the Australian Securities and Investments Commission ("ASIC") database. The ASIC information indicates that the Applicant became a director of the Company in November 2007. She is now the sole director and shareholder of the Company.
The ASIC information indicates that Mr Peet was a director of the Company between November 2007 and April 2009 and that he was also a former shareholder of the Company. It is not in dispute that he was also employed at the Parlour until his application for a tattooist licence was rejected in June 2016.
The ASIC information also indicates that Kristy was a director of the Company between April 2009 and May 2013 and that she was also a former shareholder of the Company. The Applicant's evidence was that Kristy had been involved in the management of the business for about a year until the business was established but that she then stepped out of that role as she was no longer needed.
The Applicant understood that she was not required to declare Kristy as a close associate when she lodged the operator licence application in August 2013 as she was not working at the Parlour at the time. Kristy ceased to be a Director of the Company in May 2013. She was studying at University from April 2013 and she was not employed at the Parlour.
Nevertheless, it is apparent from material before the Tribunal that Kristy has continued to promote the Parlour and its business.

The material before the Tribunal

The Applicant relies on the following evidence: a. the Applicant's own evidence. In her application to the Tribunal she provided information in regard to the grounds for the application in the form of a statement. She attended the hearing, gave evidence and was cross-examined; b. a number of statutory declarations attached to the application to the Tribunal. These include a statutory declaration of Nicholas Peet dated 13 August 2015 in which he states he is no longer a member of the Rebels, that he left the club in September 2013 and that he is not associated in any way. Statutory declarations are also provided from other local business owners and members of the community describing their involvement with the Applicant and her business over a number of years; c. a petition started on the recommendation of a large number of customers or previous customers; and d. a further petition started within the local community.
The Respondents rely on both open and confidential material. This includes: a. Documents filed pursuant to section 58 of the Administrative Decisions Review Act 1997. These documents include the licence application and related documentation regarding close associates; b. The ASD. A redacted form of the ASD has been provided to the Applicant. The unredacted form has been provided to the Tribunal on a confidential basis; c. Printouts of the Parlour's Facebook page and other Facebook pages.

Is Mr Peet a close associate of the Applicant?

It is not in dispute that Mr Peet is a former partner of the Applicant. Nor is it in dispute that that he was a director of the Company and was employed in the Parlour. In her application to the Tribunal the Applicant stated: "… Nicholas John Peet, worked at Fat Tatts from 2004 to 2016. Previous to my ownership, Nicholas was the owner of the store from 2004. I was also married to Nicholas from 1993 and we divorced in 1999. The reason for our divorce was due to Nicholas becoming involved with the Rebels Motorcycle Club as I did not agree with that environment and did not want any involvement. Since our divorce, we have remained in contact for the best interests of our child, Kristy Ann Haley. Nicholas remained employed at Fat Tatts under my direction and complied with the business rules and requirements as any other employee of the store. Until September 2013 Nicholas was a member of the Rebels Motorcycle Club. Since September 2013, he has had no involvement with the club, does not associate with any members socially nor engages with them in any way. ... His previous association with the Rebels had no impact on Fat Tatts business reputation nor his engagement as an employee."
There can be little doubt that Mr Peet was a close associate of the Applicant at the time she lodged her licence application in August 2013. At that time he was working at the Parlour. Section 4 of the Act defines a "close associate" as including a person who: … (c) is or will be engaged as a contractor or employed in the business of the applicant or licensee that is or will be carried on under the authority of the licence.
It is not clear whether Mr Peet was engaged as a contractor or if he was employed in the business. Nevertheless, I am satisfied that in August 2013 his engagement brought him within the scope of the section 4 definition of a close associate.
It is also apparent that Mr Peet was still a member of the Rebels in August 2013. He stated in his statutory declaration that he left the club in September 2013.
The Applicant gave evidence that: On 29th June 2016 Nicholas received a letter advising his application for a tattooist's license had been refused. Nicholas advised me of this outcome immediately and I immediately terminated his employment at Fat Tatts the same day, being 29th June 2016.
There is no evidence to contradict the Applicant's evidence that Mr Peet's employment at the Parlour was terminated on 29 June 2016. There is no evidence to suggest that Mr Peet has had any involvement with the Parlour since that date or that he has had any ongoing membership of the Rebels or any direct association with the Rebels since September 2013.
The Commissioner notes that on 30 October 2013 Mr Peet was quoted on a Facebook post for the United Motorcycle Council of Western Australia discussing an SBS TV Insight program regarding consorting laws. Comments attributed to Mr Peet expressed an opinion about the effect that the Act would have on his family due to their association with him. The Commissioner did not provide any evidence in regard to when the SBS Insight program was recorded. There is no evidence to indicate whether or not it was recorded prior to September 2013 - the time that Mr Peet stated the he left the Rebels. In any event, the Comments attributed to Mr Peet were in relation to the Act and its impact on his family. They do not indicate any ongoing association with the Rebels other than the editorial reference linking Mr Peet to the Rebels.
The Commissioner's evidence includes a reference to the Parlour's website and notes that, in July 2015, it showed an image of a tattoo that is identical to the Rebels insignia. The Commissioner contends that the tattoo was apparently performed by one of the tattooists at the Parlour. It appears on the website in an album titled 'Nick's gallery'. The tattoo includes a profile view of a skull wearing a confederate cap and a 1% symbol with the caption 'Respect few, fear none'. The Applicant's evidence was that Mr Peet sometimes uploaded pictures to the Parlour's website.
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The Respondents submit that Mr Peet was a tattooist at the Parlour for many years and he was a director of the company between 2007 and 2009. He continued to associate with the Rebels and voice support for the OMCG at the time he was working at the Parlour: Mr Peet only recently ceased employment at the Parlour. In these circumstances the Respondents submit that there appears to be at least some association between the Parlour and the Rebels.

Discussion

I discussed a number of issues regarding close associates in my recent decision in Dawn Mielczarek's case. At paragraphs [78] - [80] I stated: 78. As noted above, the term 'close associate; is defined in section 4 of the Act. The definition is broad. The concept of "close associate" was considered in the context of the Security Industry Act 1997 in AVS Group Pty Ltd v Commissioner of Police, NSW Police Force [2012] NSWADT 1. I stated at paragraphs [107] - [110]: "107. In the circumstances of a family business arrangement, directors commonly are formally appointed. However, it is less likely that individuals will be formally appointed to other roles within a family business than in the wider commercial sphere. 108. ... The use of the words "manager, and other executive positions and secretary, however those positions are designated" in section 5 of the Act suggests to me that the legislature intended that an official title is not conclusive of the issue. The actual role played by an individual must be considered to determine whether or not the duties can reasonably considered as falling within the scope of one or more of those positions. 109. It is not necessary that the Commissioner establish that Peter "held" a "relevant position" in the business of AVS GA in the legally relevant sense. It is sufficient if the Commissioner establishes that Peter exercised the functions of such a position without having been formally appointed. 110 That construction of the provision promotes the purpose of the Act to prevent persons who are not fit and proper to hold a licence from acting on behalf of a security business." 79. This approach was upheld in the Appeal Panel in AVS Group Australia v Commissioner of Police (no 2) [2014] NSWCATAP 53 at paragraph [361]. 80. As I noted in Stiles v Commissioner for Fair Trading & Commissioner of Police, NSW Police Force [2016] NSWCATAD 30 at paragraph [25], it is my view that those comments are equally applicable when considering whether a person is a 'close associate' for the purposes of the Act.
As I have noted above, I am satisfied that when Mr Peet was engaged in the business he was a close associate of the business. He was a close associate at that time that the Applicant lodged her licence application and she identified him as such. It is also apparent that Mr Peet was still a member of the Rebels at that time.
The question therefore arises as to whether or not Mr Peet has ceased to be a close associate.

Has Mr Peet ceased to be a close associate?

The Applicant gave evidence that Mr Peet has not been involved in the conduct of the businesses or attended the business premises since his licence application was refused on 29 June 2016. There is no evidence that Mr Peet has attended the business premises since that time.
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Each of the parties has provided written submissions in regard to the Tribunal's ability to draw inferences from the material before it. Mr El-Hage has referred me to a number of authorities in regard to that question. These authorities show that the law in relation to drawing inferences has a very long history. It is by no means a recent construction.
Mr El-Hage noted that a useful summary was set out by Spigelman CJ in Seltsam Pty Limited v McGuiness; James Hardie & Coy Pty Limited v McGuiness (2000) 49 NSWLR 262, in the context of a case where causation in tort was in issue. His Honour stated at paragraphs [84] - [89]: 84 It is often difficult to distinguish between permissible inference and conjecture. Characterisation of a reasoning process as one or the other occurs on a continuum in which there is no bright line division. Nevertheless, the distinction exists. 85 Lord Macmillan in Jones v Great Western Railway Co (1930) 47 TLR 39, in the context of stating that a possibility that a negligent act caused injury was not enough, said (at 45): "The dividing line between conjecture and inference is often a very difficult one to draw. A conjecture may be plausible but is of no legal value, for its essence is that it is a mere guess. An inference in the legal sense, on the other hand, is a deduction from the evidence, and if it is a reasonable deduction it may have validity as legal proof. The attribution of an occurrence to a cause is, I take it, always a matter of inference." 86 After referring to this passage, Sir Frederick Jordan in Carr v Baker [1936] NSWStRp 20; (1936) 36 SR(NSW) 301 said (at 306): "The existence of a fact may be inferred from other facts when those facts make it reasonably probable that it exists; if they go no further than to show that it is possible that it may exist, then its existence does not go beyond mere conjecture. Conjecture may range from the barely possible to the quite possible." 87 As Lord Wright put it in a frequently cited passage in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169-170: "Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some case the other facts can be inferred with as much practical certainty, as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture." 88 The test is whether, on the basis of the primary facts, it is reasonable to draw the inference. (See eg Layton v Vines [1952] HCA 19; (1952) 85 CLR 352 at 358). 89 In my opinion, evidence of possibility, including epidemiological studies, should be regarded as circumstantial evidence which may, alone or in combination with other evidence, establish causation in a specific case.
That approach was affirmed by the Court of Appeal in Nguyen v Cosmopolitan Homes (NSW) Pty Ltd [2008] NSWCA 246 and State of New South Wales v Fuller-Lyons [2014] NSWCA 424.
Where direct proof of a fact is not available it is enough that the circumstances appearing in the evidence give rise to a reasonable and definite inference as to that fact's existence: Baranski v Comcare (2013) 296 ALR 438 at paragraph [20].
There is no reason to adopt a different approach to drawing inferences in the context of the Act.
The Respondents submit that it is open to the Tribunal to make factual findings through a process of inferential reasoning, provided that the relevant material which has been adduced establishes facts whose existence renders it reasonably probable that the inferred findings also exist.
The Applicant submits that the drawing of an inference based on comments posted on Facebook is manifestly unjust on the basis that those comments are at most speculative, and any inference drawn on them do not have probative weight to arrive at a conclusion that the Applicant or any operation of their business, present a risk to the public safety or public interest of the community.
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In the circumstances of this matter I am not satisfied that the evidence gives rise to a reasonable and definite inference that Mr Peet continues to have any association with the business. This raises the question of the amount of time that would need to pass before a person can be regarded as having ceased to be a close associate. In my view, the close associate provisions are directed towards persons who are in apposition to influence the business that is under consideration. The potential to influence the business will vary depending on the circumstances of the association.
It is reasonable to assume that Mr Peet continues to have an association with Kristy and it is likely that he will also have an association with the Applicant. However, there is no reason to assume that he will also have an association with the Parlour. It appears that his association with the Parlour ceased when his engagement as a tattooist in the Parlour ended.
In the circumstances, I am satisfied that Mr Peet ceased to be a close associate at from 29 June 2016. Therefore, it is my view that he is no longer a close associate for the purposes of the Act.
However, even if Mr Peet should still be regarded as a close associate because of the limited time that has passed since his engagement as a tattooist in the Parlour ended, I am not satisfied that his association with the Parlour should prevent the Applicant from obtaining the licence she is seeking.
In this regard, his membership of the Rebels is a relevant consideration. I note the comment by Senior Member Walker in Sasha Mielczarek's case at paragraph [138]: 138. In the present context, the correct position seems to be that membership of an OMCG such as the Rebels is a major factor in the consideration of fitness and propriety and may come close to establishing a prima facie case, but that other factors, such as the applicant's criminal history or lack of one, and his or her other known activities or qualities, may prevent, or alternatively reinforce, an inference of lack of fitness or propriety.
It is my view that the evidence does not give rise to a reasonable and definite inference that Mr Peet continued to have any association with the Rebels since 2013. The fact that in October 2013 he was quoted as having expressed an opinion about the Act does not give rise to that inference.
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To some extent, Mr Peet's circumstances are comparable to those considered by Senior Member Ransome in McCurday v Commissioner for Fair Trading [2017] NSWCATAD 35 ("McCurday"). Mr McCurday had been a member of the Comanchero OMCG. At paragraphs [72] - [75] the Senior Member observed: 72 Here, Mr McCurdy is no longer a member and there is no evidence of any active continuing association. It has now been some three and a half years since Mr McCurday handed back his colours. This is a fair period of time. Furthermore, no evidence has been provide of any influence - either before or after Mr McCurday's resignation - of any influence of other members of the Comanchero in the tattoo parlour. 73 It is possible, however, that, given his previous position with the Central Coast Chapter, there is a risk that his tattoo parlour would be associated in the mind of the public with the Comanchero. The 2011 incident occurred over 5 years ago and there is no evidence of any other similar incidents, or indeed any allegations of violence or illegality, involving the tattoo parlour. In fact, there is little evidence in relation to the tattoo parlour itself and any association, perceived or otherwise, with the Comanchero apart from Mr McCurday's ownership. In these circumstances it would seem that the risk of any member of the public associating the tattoo parlour with the Comanchero would be very small. 74 I have no doubt that, given his former history as a member of the Comanchero, should there be any irregularities in the way Mr McCurday conducts his business or should he, once again, associate himself with an OMCG, that the police will be made aware of those activities. 75 It is not possible to find that there is no risk to the public interest in Mr McCurday holding an operator licence. However, in the circumstances I am not satisfied that the risk is sufficiently high that it should prevent him from holding the licence.
Similarly, the mere fact that Mr Peet may have uploaded a photograph of tattoo artwork depicting the Rebels insignia on the Parlour's website does not of itself establish a continued association with the Rebels. It is probable that Mr Peet was responsible for uploading the picture or, given that it was stored in a folder under his name, that he was at least aware that it was on the site. However, there is no evidence to show that Mr Peet was the person who carried out the tattoo artwork or that it was intended to be more than a demonstration of the quality of the work offered by the Parlour.
Senior Member Walker in Sasha Mielczarek's case found at paragraph [155] 155. In light of all the evidence, I conclude that the applicant has established that, notwithstanding his membership of the Rebels OMCG, he is a fit and proper person to hold a tattooist licence.
In McCurday Senior Member Ransome found that the licence should be granted in circumstances where the evidence indicated that Mr McCurday had ceased to be a member of an OMCG and the risk of any member of the public associating the tattoo parlour with the OMCG would be very small.
In the circumstances if this matter, even if Mr Peet remains a close associate of the Applicant, I am not satisfied that the risk is sufficiently high that it should prevent the licence being granted.

The other a close associates

The Commissioner also raised concerns in relation to other individuals who have been engaged in the business. These include the Applicant's daughter Kristy who works at the Parlour. Kristy was also a Director of the company until May 2013. The Applicant did not declare Kristy as a close associate on her operator licence application.
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The Commissioner also referred to posts from the Parlour's Facebook page. The Applicant's evidence was that the Facebook page was updated by whoever had the time to do so. The Commissioner contends that Kristy repeatedly shared posts from the Parlour's Facebook page on her Facebook page and that on 25 November 2015 she posted an OMCG-related article on her Facebook page. The Commissioner contends that this conduct may give a public perception that she actively supports OMCG-related challenges.
The Commissioner also referred to posts from Kristy's Facebook page that promotes Mr Mitchell 'Stonewall' Jackson as a body piercer at the Parlour. The Commissioner also noted that the Applicant has not notified of Mr Jackson's employment at the Parlour.
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The Applicant submits that comments by Kristy do not directly link to any association or connection with OMCGs, nor should weight be given to them, because the inferences drawn from them are indirect as to any conclusive connection to any OMCG, and are merely manifestations of an individual's views and an exercise of their freedom of speech. The Applicant submits that it would be manifestly unjust to draw that any inferences of a risk to the public interest from the Facebook posts and pictures on the website.
The Applicant further submits that the issue of social media, and more broadly online media, raises a larger issue of whether associations can be assumed on the basis of online activity.

Discussion

I recently considered the issue of inferences that can be drawn from online activity such as Facebook posts in Hawes v Commissioner for Fair Trading [2017] NSWCATAD 30. In Hawes I accepted that the postings on the Applicant's social media sites were a deliberate pretence that was intended to give a false impression of the Applicant's presence in the industry. I also noted that where a business establishes a Facebook page and encourages the wider public to interact with the business through that page, the business' ability to control what is submitted on the site is limited. This is a commercial decision to be taken by the business. While it may be imprudent to permit posts that could allow an impression to be formed in regard to associations, it is not in contravention of the Act. It also limits the ability to draw inferences from posts that are made to the page where there is no other evidence to support those inferences.
Caution must be taken to avoid drawing inferences that are not warranted. An inference cannot be made where more probable and innocent explanations are available on the evidence. For example, the fact that a photo of a particular piece of artwork is posted on a website might suggest that the poster supports a cause that is depicted in the artwork. However, it may simply suggest an appreciation of the skill of the artist. Without further evidence, the inference should not be drawn that the poster presents a risk to the public interest merely from the Facebook posts and pictures on the website.
The Commissioner also referred to a post from Kristy's Facebook page that provides a link to an article titled "Police 'censor' esteemed researcher". The post states "Gang researcher Dr Jarrod Gilbert accuses police of "chilling" censoring over data access ban" and contains a photograph depicting several individuals wearing what appears to be Rebels New Zealand insignia.
The Commissioner contends that this may give a public perception that Kristy actively supports OMCG-related challenges. That could be correct. However, it may also give rise to the perception that Kristy is supportive of academic freedom. Without more, I cannot draw the inference that Kristy actively supports OMCG-related challenges from the fact that she posted this link. In any event, this link is posted on Kristy's personal Facebook page. It is not on the Parlour's website. In my view, the fact that Kristy's posted the link on her personal Facebook page should have no implications for the decision of whether the licence should be granted.
For completeness, I note that I am not satisfied that Kristy continues to hold any "relevant power" as defined by the Act. The mere fact that she continues to promote the Parlour's business does not place her in a management position in relation to the Parlour.
The Commissioner referred to posts from Kristy's Facebook page that promotes Mitch 'Stonewall' Jackson as a body piercer at the Parlour. This post appears to be no more than a promotional activity for the business. There is nothing in the post that suggests any association between either Kristy or the Parlour and any OMCGs. In my view, the post should have no implications for the decision of whether the licence should be granted.
It is possible that Kristy will be employed or engaged in the Parlour in the future and at that stage she would be regarded as falling within the broad definition of 'close associate' and would need to be declared as such.
Of greater concern is the Applicant's failure to advise that Mitch Jackson was working at the Parlour. The Applicant submitted that this failure was due to her misunderstanding of the rules as she believed that only those employees who were tattooing in the store were required to be included on the form.
The Applicant further submits that Mr Jackson began employment at the Tattoo Parlour from December 2015. Prior to this he was employed by Wicked Ink Tattoo & Body Piercing Studio. Wicked Ink was granted an Operator's Licence whilst Mr Jackson was employed at the store.
The Applicant noted that Mr Jackson no longer works at the Parlour.
I am satisfied that the Applicant should have advised that Mitch Jackson was working at the Parlour. However I do not consider that the Applicant's failure to advise was a deliberate attempt to conceal that information. In the circumstances, particularly given that Mr Jackson no longer works at the Parlour, I do not consider that the failure should prevent the licence being granted.

The petitions and references

The petitions provide little assistance in this matter. It is apparent that there is strong community support for the Applicant's business but in the absence of any indication that the petitioners have specific knowledge of the reasons for the refusal of the licence application this support does not assist in determining whether or not the licence should be granted. There is no suggestion that the Applicant is not a fit and proper person to hold a licence or that she is not well regarded and therefore the references are also of little assistance in this matter.

Conclusion

In my view, the circumstances that existed at the time the application was initially lodged with Fair Trading were a cause for concern. At that stage Mr Peet was either a member of the Rebels or had only recently ceased to be a member and he was a close associate of the Applicant's business. At that time there could have been sufficient reason to refuse to grant the licence because of those associations. The Commissioner's concern is therefore understandable.
However, the circumstances have changed in the time that has passed since the application was lodged. Mr Peet is no longer a member of the Rebels and he is no longer a close associate of the business. I have no reason to believe that the Applicant has ever had any direct links to the Rebels e.g. it is not suggested that she is a "clean skin" acting as a front for them. I do not accept that the indirect links that have existed in the past are likely to create a public perception that there is an association between the Parlour and the Rebels.
In conclusion, I do not consider that the evidence supports the Commissioner's decision that the grant of the licence is not in the public interest.
That being the case, it is my view that the licence should be granted.

Orders 1. The decision to refuse to grant the Applicant an operator licence in relation to the Fat Tatts and Body Piercing Parlour is set aside. 2. In its place the decision is made that the licence 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: 08 February 2017

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Judgment (16 paragraphs)

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Cases Cited (23)

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