Loveday v Commissioner for Fair Trading

NCAT Administrative and Equal Opportunity|2018-04-03

Overview

The Commissioner for Fair Trading has refused Ms Loveday's application to be granted an operator's licence under the Tattoo Parlours Act 2012 (NSW). An operator's licence authorises the licensee to carry on a body art tattooing business. She has applied to the Tribunal for the decision refusing the licence to be suspended, or "stayed" until the Tribunal makes its final decision. A stay would allow her to continue operating the tattooing business, Tattoo Nation, in Port Macquarie. In deciding whether to suspend the Commissioner's decision I must take into account the public interest as well as Ms Loveday's interests and those of her employees. I have received confidential evidence from the Commissioner of Police who is also a party to these proceedings. Taking all the evidence into account, I have decided that a stay should not be granted. The hearing will take place on 15 June 2018.

Background

Following the introduction of the Tattoo Parlours Act Ms Loveday applied for an operator licence on 21 March 2013. The legislation allowed her to continue operating until notified that the application had been refused. The application was referred to the Commissioner of Police for assessment. On the basis of certain material, some of which is confidential, the Commissioner of Police determined that Ms Loveday was not a fit and proper person and that it would be contrary to the public interest to give her a licence. That decision was made on the basis of her criminal history, her alleged disregard of licencing legislation and one other confidential reason. Because of this Adverse Security Determination, the Commissioner for Fair Trading was obliged to refuse Ms Loveday's application for a licence and did so on 15 December 2017.

Legal principles

The general rule is that an application to the Tribunal for an administrative review of a decision does not prevent the decision from taking effect. But the Tribunal may make an order "staying or otherwise affecting the operation of the decision". The power is set out in s 60 of the Administrative Decisions Review Act 1997 (NSW): (1) Subject to this section, an application to the Tribunal for an administrative review under this Act of an administratively reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision. (2) On the application of any party to proceedings for an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application. (3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account: (a) the interests of any persons who may be affected by the determination of the application, and (b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and (c) the public interest. …
In Williamson v Director General, Department of Transport [2000] NSWADT 165, the Administrative Decisions Tribunal set out its understanding of s 60. In summary, it held at [12], that the Tribunal must firstly be satisfied that a stay is "appropriate to secure the effectiveness of the determination of the application". The Tribunal went on to say at [19], that: If the threshold test is passed, and there is power to grant a stay because the Tribunal considers such an order appropriate to secure the effectiveness of a final determination, the Tribunal then engages in a balancing exercise. …
The balancing exercise was a reference to s 60(3) where the Tribunal must consider whether it is desirable to grant an operator's licence taking into account the interests of any person affected by the determination, any submissions made by the administrator who made the decision and the public interest.
According to the Commissioner for Fair Trading, the Tribunal must be satisfied, as a threshold issue, that Ms Loveday will suffer irreparable harm which would render the substantive application futile. As the inference can be drawn that the business is solvent, the Commissioner submitted that it is not necessary to grant a stay to secure the effectiveness of the hearing.
In my view, that is not the correct interpretation of the phrase "to secure the effectiveness of the determination of the application" in s 60(2) for two reasons. Firstly, contrary to the view expressed in Williamson, there is no 'threshold test" that needs to be passed. Section 60(2) and (3) give the Tribunal a single discretionary power to make a stay order or to refuse to make such an order taking into account all relevant considerations. Secondly, the words "to secure the effectiveness of the hearing" include a situation where the applicant will suffer irreparable loss in the sense that no recompense for it can be obtained if the application is ultimately successful: Re Pelling and Secretary, Department of Aviation [1984] AATA 179; (1984) 5 ALD 638 at 639. It is not confined to the situation where a hearing would be pointless because the applicant will go out of business if a stay is refused. I will elaborate briefly on each of these conclusions.
Section 60 of the Administrative Decisions Review Act was modelled on the equivalent provision in s 41 of the Administrative Appeals Tribunal Act 1975 (Cth). That provision states that: 41 Operation and implementation of a decision that is subject to review (1) Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision. (2) The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review. …
When enacting s 60(2) and (3) of the Administrative Decisions Review Act, the legislature chose to express the concepts in s 41(2) of the Administrative Appeals Tribunal Act in two subsections instead of one. In doing so, I do not agree with the Tribunal in Williamson, that the legislature was intending to impose a threshold test. Section 41(2) of the Administrative Appeals Tribunal Act has never been interpreted in that way. Rather, section 41(2) gives the AAT a single discretionary power to be exercised by taking into account all relevant considerations. President Downes J set out a non-exhaustive list of those considerations in Re Scott and Australian Securities and Investments Commission [2009] AATA 798 at [4]: (a) The prospects of success. (b) The consequence for the applicant of the refusal of a stay. (c) The public interest. (d) The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not. (e) Whether the application for review would be rendered nugatory if a stay were not granted. (f) Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.
Significantly, In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81, the Court of Appeal saw it as relevant, when determining whether a stay was appropriate, to take into account not only whether there is any practical point in reviewing the decision if a stay was not granted, but also the likelihood that the decision will be affirmed and the correct decision will not have been implemented for some time. The Court held at [129] that: There is an express statutory power for the Tribunal to grant or refuse a stay or other order "as it considers appropriate to secure the effectiveness of the determination of the application". In other words, the purpose of granting a stay or other order is connected with the determination of the application. "[S]ecur[ing] the effectiveness of the determination of the application" involves matters such as ensuring that the lapse of time before the determination is actually made does not deprive the review of practical point. It also involves considering the possibility that the result of the review might be that the decision is affirmed, with the consequence that if a s 60(2) order is granted the decision that the review ultimately decides was correct has not been implemented during the period of the s 60(2) order:
My conclusion is that s 60(2) and (3) confer a single discretionary power on the Tribunal to grant a stay and there is no threshold test that needs to be met. Rather, the question of whether a stay is necessary to secure the effectiveness of the hearing is a mandatory consideration that the Tribunal must take into account when exercising the discretion: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39.
In Williamson v Director General, Department of Transport [2000] NSWADT 165, the Administrative Decisions Tribunal, when interpreting the stay power in s 60, quoted several AAT decisions. In those decisions, the AAT held that the phrase means that without a stay: (1) the hearing will not be fully effective: Australian (NDT) Services Pty Ltd and Civil Aviation Safety Authority [1999] AATA 79 at [13]; (2) the hearing will be "jeopardised" or "rendered nugatory": Re Repatriation Commission and Delkou [1985] AATA 297; (1985) 8 ALD 454 at [8]; (3) the applicant will suffer serious irreparable harm, in the sense that no recompense for it can be obtained if the application for review is successful: Re Pelling and Secretary, Department of Aviation [1984] AATA 179; (1984) 5 ALD 638 at 639.
Of particular relevance in the context of the present case is the decision of Deputy President Thompson in Re Pelling and Secretary, Department of Aviation [1984] AATA 179; (1984) 5 ALD 638 at 639. I will set out the passage in full: "6 If, after the facts have been ascertained at the hearing, the Tribunal considers that the applicant did deliberately flout the law and that his conduct warrants suspension of his licences in spite of the hardship which it will cause him and the company, the right or preferable decision may well be to affirm the decision under review. But, if its implementation before the facts have been established is likely to cause him or the company serious irreparable harm (irreparable in the sense that no recompense for it can be obtained if the application for review is successful) and so to affect adversely the effectiveness of the hearing and determination of the application under review, it may be appropriate to stay the implementation of the decision pending the hearing and decision of the application. However, in considering whether that is so, it is necessary that their interests be weighed against the interest of the public in the safe operation of aircraft. Only thus can the right or preferable decision regarding the stay be given.".
In accordance with this passage, in my view, the phrase "to secure the effectiveness of the determination" includes taking into account circumstances where the applicant is likely to suffer irreparable harm in the sense that no recompense for it can be obtained even if the application for review is successful. That is the situation in this case.
Because this case involves the refusal of an application for a licence, the staying of that decision would mean that Ms Loveday would still not have a licence. However, s 60 also gives the Tribunal power to make an order "otherwise affecting the operation of the decision". In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 at [16], Basten JA described the word "stay" as "a somewhat imprecise term which is usually understood to refer to a future event". In that case, which involved the revocation of a licence, the Court of Appeal acknowledged at [16] to [18] and [95] to [96] that while it is not possible to "stay" a revocation decision, s 60(2) is wide enough to enable the Tribunal temporarily to reinstate a licence that has been revoked.
Applying the same reasoning to this case, the Tribunal has power to make an order which has the effect of temporarily granting an operator's licence.

Effect on Ms Loveday and her employees if a stay is not granted

I accept Ms Loveday's evidence that, if a stay is refused neither she nor her two employees would receive any income from the business at least for the next 2 months until the hearing. I also accept that she has expenses although she did not provide copies of tax returns or details of her assets. The Commissioner conceded that Ms Loveday will suffer financial loss if a stay is not granted and that she will not be compensated for that loss even if the application for review is successful. I am satisfied in this case that Ms Loveday would suffer loss of income from the Tattoo Nation business if the stay is refused. That constitutes irreparable harm because no recompense for it can be obtained if the application for review is successful. I also take into account that two employees of Ms Loveday will not receive any income from the business if a stay is not granted.

Public interest

Ms Loveday gave evidence that her business is not affiliated with any criminal enterprise of outlaw Motorcycle Gangs. She was not questioned about that evidence.
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Criminal history

On 26 October 2017 Ms Loveday was given a 6 month bond under s 10(1)(b) of the Crimes (Sentencing Procedure) Act 1999 (NSW) for various traffic offences including driving with an illicit drug present in her blood.
On 8 December 2017, Ms Loveday tested positive to methamphetamines while driving and was subsequently charged with driving a vehicle with an illicit drug present in her blood. She has been issued with a Court Attendance Notice.
Ms Loveday provided character references from customers and business associates. I have taken those references into account.

Employment of Mr Lindroos

It is alleged that Ms Loveday employed an unlicensed tattooist, Dylan Lindroos. Ms Loveday gave evidence that Mr Lindroos joined the business around 30 October 2015 but stopped working there when he was charged with assault. Facebook posts of Tattoo Nation between 2013 and 2017 show several tattoos Mr Lindroos had drawn on customers.
On 11 May 2017, Police conducted an onsite inspection of the business. Mr Lindroos neither admitted nor denied that he was working in the business. Ms Loveday was not present. After that, Police contacted Ms Loveday and she told them that she did not employ Mr Lindroos.
On 6 July 2017, Ms Loveday sent an email advising that she is now a sole trader, she is not in partnership and has no associates. She disclosed that one of her employees was Mr Lindroos. When asked why she said in that email that Mr Lindroos was an employee, if that was not the case, she said, "I don't know why I've got that there. I'm sorry, I can't answer". This answer suggests to me that Ms Loveday is not disclosing everything she knows about Mr Lindroos' employment.
Police did not take any formal action against Ms Loveday or Mr Lindroos after the inspection in May 2017. In the COPS event record, the Police made the comment that: There is a lot of ambiguity in this jurisdiction particularly around licensing arrangements pre 1 October 2013. Both [Ms Loveday] and [Mr Lindroos] were operating under receipts as Operator licences and paid substantial fees for that right.
I am satisfied that Ms Loveday did not notify the Commissioner of Mr Lindroos' employment in October 2015. However, no submissions were provided as to whether s 23 of the Tattoo Parlours Act, which requires an operator to notify the Commissioner of staff changes, applied to Ms Loveday at the relevant time.
The Commissioner for Fair Trading did not clearly state the periods during which Mr Lindroos was not entitled to work as a tattoo artist or precisely what Ms Loveday's obligations were as the manager of the business. While there is strong evidence that Mr Lindroos was carrying out work as a tattoo artist at Tattoo Nation, and that Ms Loveday knew he was doing so, I am not satisfied on the basis of the evidence and submissions before me at the stay hearing that Ms Loveday has acted unlawfully in relation to her employment of Mr Lindroos.

Disregard of the law and licencing requirements

Ms Loveday was advised of the Commissioner's decision not to grant a licence by letter dated 15 December 2017. She is not correct when she says in her affidavit of 29 March 2018 that she has never been refused the licence. The letter drew Ms Loveday's attention to provisions in the legislation including s 6 of the Tattoo Parlours Act 2012 which makes it an offence to carry on a body art tattooing business without an operator licence. The final paragraph of that letter states that: As your application for a licence was made before 1 October 2013 … pursuant to clause 29(2)(b)(ii) of the Tattoo Parlours Regulation 2013, sections 6 and 8 of the Tattoo Parlours Act 2012 are taken not to apply in relation to the carrying on of that business [Tattoo Nation] at those premises until 7 days after the day on which you are notified of this decision.
The Commissioner submitted that the letter sets out that Ms Loveday must close the business after 7 days. I am unable to agree with that characterisation of the letter. The letter does not use the words 'close the business' or any other words which indicate to a lay person that she had to cease trading within 7 days.
Ms Loveday gave evidence that she panicked when she read this letter on 25 January 2018 after coming back from an overseas holiday. She said she thought she was fine to continue operating, but panicked because of the time frame. She said she did not think the decision was final until she went to court. Contrary to the Commissioner's submission, I cannot infer that Ms Loveday was on notice as of 25 January 2018 that she was obliged to cease trading within 7 days.
On 19 March 2018 solicitors for the Commissioner emailed Ms Loveday's solicitor pointing out that Ms Loveday was obliged to cease trading. Eight days later, on 27 March 2018, Police went to Tattoo Nation and saw that it was open for business. Police gave one of Ms Loveday's employees a notification to cease trading. At 2 pm the same day, Ms Loveday's solicitor contacted Police inquiring about the matter.
According to the Commissioner, it can be inferred that Ms Loveday's solicitor would have notified their client of the contents of the 19 March 2018 email. I do draw that inference. It follows that Ms Loveday continued to trade for eight days after she was effectively on notice that she was not permitted to do so. In that sense she has disregarded the law.

Consideration

Ms Loveday has been operating the business since 2008 and makes a fair point when she says that the period of two months or so before a hearing is a relatively short period given that history.
The consequences for Ms Loveday if a stay is refused is that she will not be able to operate for the next two months. Neither she, nor her employees will receive income from the business during that time. That constitutes irreparable harm for which she will not be compensated even if successful. Competition from other tattoo parlours may make it difficult but without more information about the viability of the business I am not satisfied that the business will not be able to re-open after that time if the licence is granted.
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Orders

The application for a stay of the decision to refuse to grant the applicant a licence is refused.
Disclosure of an extract from the unredacted Adverse Security Determination dated 22 November 2017 is restricted to the Second Respondent, the legal representatives for the Second Respondent and the Tribunal pursuant to section 64(1)(d) of the Civil and Administrative Tribunal Act 2013 (NSW).
That part of the hearing dealing with the documents referred to in order 2 is to be conducted in the absence of the Applicant and the public pursuant to s 49(2) and s 64(1)(d) of the Civil and Administrative Tribunal Act 2013 and s 27(4)(b) of the Tattoo Parlours Act 2012.
The publication of that part of the hearing dealing with the documents referred to in order 2 is prohibited pursuant to s 64(1)(b) and (c) of the Civil and Administrative Tribunal Act 2013.

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: 11 April 2018

Tattoo Parlours Act 2012(NSW)

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