On 3 February 2017 the Commissioner for Fair Trading (Fair Trading) refused an application by Yuhuai Lu for an operator licence under the Tattoo Parlours Act 2012 (the Act). The reason for the refusal was because the Commissioner of Police (the Commissioner) had made an adverse security determination under s 19(2) of the Act. The Commissioner had determined that Mr Lu is not a fit and proper person to be granted the licence because of his history of disregard for licensing legislation and it would be contrary to the public interest for the licence to be granted because of that disregard.
Mr Lu, by an application lodged on 2 March 2017, has sought review of that decision by the Tribunal.
[2]
Nature of review
A person whose application for a licence under the Act has been refused may apply to this Tribunal for an administrative review of that decision (s 27(1)).
In circumstances where, in accordance with s 14 of the Act, Fair Trading has referred a licence application to the Commissioner for an investigation and determination as to whether the applicant is a fit and proper person to be granted the licence and whether it would be contrary to the public interest for the licence to be granted, and the Commissioner has made an adverse security determination, Fair Trading must refuse to grant the licence.
On review, however, the Tribunal is not bound by the security determination and must make a fresh determination, on the basis of the information before it, whether the applicant is a fit and proper person to be granted the licence and whether it would be contrary to the public interest for the licence to be granted (Austin v Commissioner for Fair Trading & Commissioner of Police [2016] NSWCATAP 179 at [37]).
The issues in this case are therefore whether Mr Lu is a fit and proper person to be granted the licence and whether it would be contrary to the public interest for the licence to be granted. The major factor in determining these issues is Mr Lu's past conduct as the operator of a tattoo parlour.
[3]
Background
Mr Lu states that he migrated to Australia from China in 2006. In 2008 he started work at Tattoo World at Broadway as a tattooist and in 2010 moved to Tattoo World's shop at Baulkham Hills. Mr Edmond Doueihi was the proprietor of Tattoo World and operated three shops (one in Broadway, another in Baulkham Hills and a third in Haymarket).
Mr Lu states that in early March 2013 Mr Doueihi offered to sell him one of the shops. They settled on a price for the Haymarket shop and on 15 March 2013 he registered a company, Monkeytoy's Tats Pty Ltd, of which he was the sole director and shareholder. Mr Lu said he entered into a written contract for the purchase of the shop with Mr Doueihi in March 2013, but Mr Doueihi backdated the contract to May 2011. He took over the business in September 2013.
Prior to the introduction of the Act, a person did not need a licence to operate a tattoo parlour. From 1 October 2013, however, a licence was required. Mr Lu made an application for an operator licence on 16 September 2013 and, under the transitional provisions in the new legislation, was permitted to continue to operate the business until his application was either granted, refused or treated as being withdrawn. That application (the first application) was treated as withdrawn on 24 September 2015 under s 16(2) of the Act.
Mr Lu lodged a second application for an operator licence on 1 July 2016. As noted above, that application was refused on 3 February 2017 and is it that refusal that is the subject of this review.
[4]
Evidence before the Tribunal
Both parties filed a substantial number of documents with the Tribunal and several witnesses appeared at the hearing in open session. Mr Lu was questioned extensively about his circumstances and the events he states occurred. Mr Lu states that his English language skills are limited and he was assisted by an interpreter in the Mandarin language at the hearing.
The Applicant has been provided with the adverse security determination in a redacted form. An unredacted copy of that document has been provided to the Tribunal on a confidential basis. The Commissioner also provided information to the Tribunal on a confidential basis in the absence of the Applicant. The Applicant is aware that a confidential session took place but he is not aware of the information that was presented. I note that the document behind tab S in the unredacted folder of documents was not relied upon at the hearing.
[5]
Fit and proper
The expression 'fit and proper' is a common statutory term and has been considered by this Tribunal and in other jurisdictions in numerous cases.
In Hughes and Vale Pty Ltd v New South Wales (No.2) (1955) 93 CLR 127 at 156-7 the High Court said:
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.
These sentiments have been echoed in cases before the Tribunal and it is generally accepted that what is fit and proper needs to be determined by reference to the activities in issue and is to be gauged in light of the nature and purpose of the activities that the person will undertake (AJO v Director-General of Transport [2012] NSWADT 101 at [26]; Austin v Commissioner for Fair Trading & Commissioner of Police [2016] NSWCATAP 179 at [82]).
In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380 Toohey and Gaudron JJ said:
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.
They went on to say at 388:
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.
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.
In Smith v Commissioner of Police & Commissioner for Fair Trading [2014] NSWCATAD 184 at [19-20] in the context of the Tattoo Parlours Act, Senior Member Montgomery stated:
[19]…There is no "Principles and Objects" section within the Act. The Tribunal can look at Hansard and the Minister's speech to ascertain the purpose of the Act - the mischief that the statute was designed to cure. In his second reading speech on the introduction of the Bill to Parliament, the Minister for Police and Emergency Services Mr Gallacher noted that the Act was introduced in response to gang crime in NSW. It aims to break the stranglehold that outlaw motorcycle gangs have over the tattoo industry. It was anticipated that removing bikies from the tattoo industry will reduce the reasons for rival gangs to fight turf wars, because these businesses will no longer be symbols of a gang's territory…
[20] While the second reading speech focused on the involvement of outlaw motorcycle gangs in the tattoo industry, it is clear from the Act that the broader intention is to rid the industry of any criminal or otherwise undesirable element and the avoidance of improper conduct.
The respondent's case that Mr Lu is not a fit and proper person
[6]
Public interest
In general, the concept of the public interest is designed to give the broader interests of the community priority over private interests of individuals. In Smith v Commissioner of Police & Commissioner for Fair Trading [2014] NSWCATAD 184 Senior Member Montgomery set out a number of authorities in which the concept of the public interest has been considered (at [42-47]). In Roberts v Commissioner for Fair Trading [2016] NSWCATAD 218 Senior Member Montgomery said that the authorities referred to in Smith indicated that:
1. The 'public interest' is a term embracing matters, among others, of standards of human conduct and of the functioning government and government instrumentalities. The interest is therefore the interest of the public as distinct from the interest of an individual or individuals.
2. 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.
3. An applicant's personal interests in retaining his licence cannot outweigh the public interest in having full confidence in the professionalism of people involved in the security industry.
4. 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.
He went onto say:
Public confidence in the scheme and regulatory requirements under the Act is a public interest consideration. In the Second Reading Speech, Mr Roberts stated that the public interest test under the Act "is designed to address the criminal matters currently surrounding the industry, such as ... personal violence". The scheme has as one its objectives the exclusion of persons with criminal tendencies from the tattooing industry, with a view to protecting public safety.
The Tribunal's task is to place itself in the position of a member of the public knowing Mr Lu's associations and record and consider whether that person would object to Mr Lu operating a tattoo parlour (Naziry v Director-General, Ministry of Transport [2004] NSWADT 40 at [55]).
[7]
Factual circumstances and evidence
The Commissioner has raised several matters which he states demonstrate that Mr Lu should not be granted the licence. These matters are set out below along with the evidence of the parties relevant to each issue.
[8]
Trading without a licence
Senior Constable Huw Prowse gave evidence that, prior to the Act coming into force, officers of Strike Force Raptor attended various tattoo parlours to carry out inspections and to provide information on the new laws. On 25 July 2013 Senior Constable Prowse attended the tattoo parlour subsequently bought by Mr Lu from Mr Doueihi. Mr Lu was present. Senior Constable Prowse could not recall what exactly was said during the inspection but stated that, generally, a range of matters were discussed, including that licences were required.
As noted above, Mr Lu first applied for an operator licence on 16 September 2013 and that application was treated as withdrawn on 24 September 2015. During that period Mr Lu was permitted to trade under the transitional provisions in the Act in relation to the new licencing regime. It is not in dispute that he was not, however, under the law permitted to trade after that date. It is also not in dispute that the fact that he lodged a second application on 1 July 2016 did not alter the position that he could not trade.
The Commissioner's position is that Mr Lu operated a tattoo parlour without having the requisite licence from a date shortly after 24 September 2015 to about 6 February 2017. Mr Lu states that he did not intentionally operate the tattoo parlour illegally and that, for a variety of reasons, his actions were reasonable and understandable in the circumstances.
When Mr Lu completed the first application form for an operator licence in September 2013 he provided an email address and gave an address in Ashfield as his residential address. He did not provide a different postal address but did provide a business address for the owner of the tattoo business, Monkeytoy's Tats Pty Ltd, trading as Rubixcube Tattoo Studio. He also provided a telephone number. Mr Lu states that the address in Ashfield is the address of his aunt and, at the time, he had all important mail sent there as he was renting at the time. Mr Lu did not complete parts of the form, including that relating to close associates.
The evidence of the Commissioner is that on 24 September 2013 an officer of Fair Trading sent a letter by ordinary post to Mr Lu at the Ashfield address. The letter advised Mr Lu that the application was incomplete and he had not completed the declaration in relation to close associates. The letter also sought other information. The letter also advised that "if you fail to comply with the requirements with the requirements of this notice within 21 days the application may be refused". No response to the letter was received by Fair Trading.
Mr Lu states that he telephoned Fair Trading in early 2015 and was told that his application was "being processed". Mr Lu's wife, Ms Kathy Cheng, states that she was with her husband when he made the telephone call to Fair Trading and confirms the content of the conversation. She also stated that the call was made to the Fair Trading general number and they were not put through to the licensing unit.
Mr Peter Flematti, Licensing Advisor in the Business Licencing Unit of NSW Fair Trading gave evidence that, while records of all calls are not kept, any call from a person inquiring about a licence would have been put through to an officer in the licensing unit if the call had been made to the Fair Trading generic number. The licensing officer would have had access to the Government Licensing System (GLS) and GLS would have shown the status of the application as "Awaiting further information from applicant".
No further action was taken by Fair Trading at this time. On 12 August 2015 Fair Trading sent another letter to Mr Lu at the Ashfield address. This letter, which was headed "FINAL NOTICE", referred to the previous letter of 24 September 2013 and asked for the same information. The letter also stated that failure to comply with the requirements of the notice within 14 days may result in the application being refused.
According to Fair Trading, the letter was sent by ordinary post to the Ashfield address. The letter was also sent to the email address provided by Mr Lu on the application form. The evidence of Fair Trading is that there is no indication the email was not received and there was no bounce back. There was no response by Mr Lu to either the letter or the email.
On 24 September 2015 a letter was sent by post from Fair Trading to Mr Lu at the Ashfield address. The letter advised that the application for a licence had been treated as withdrawn because Mr Lu had failed to provide information as requested. The letter stated that Mr Lu would receive a refund of part of the application fee. The letter also drew Mr Lu's attention to provisions in the Act which set out the requirements to have a licence and penalties for breach of the provisions.
Fair Trading processed a refund in the amount of $555 to be sent to Mr Lu at the Ashfield address. The cheque was never presented.
Mr Flematti gave evidence about Fair Trading's practice in the processing of licensing applications and relevant entries in Fair Trading's records. He conceded that there is no proof the letters sent to Mr Lu concerning the first application were in fact posted. He said, however, that it is unlikely the letters were not sent as usual mail procedures would have been followed. He stated that, as there had been no response to the letters of September 2013 and August 2015 or the email, further inquiries could have been made of Mr Lu, but it seemed they were not.
Mr Lu's evidence is that he did not receive the letters of 24 September 2013, 12 August 2015 or 24 September 2015. He also did not receive the email of 12 August 2015. He states that he checked the mail at Ashfield at least every month, but received nothing from Fair Trading.
Mr Lu states that on about 27 June 2016 he contacted Fair Trading and was told his application has "expired". Ms Cheng stated that she was with her husband and they were put through to someone in the licensing unit. The person he spoke to also told him he had been sent an email on 12 August 2015. He states he checked his email and nothing had been received by him from Fair Trading on that date. He asked that the email be sent to him again and he received what the officer sent. The officer was still on the phone and he asked her what he should do and whether he could still lodge the requested documents. He states he had nothing to hide and would have supplied the requested information if he had known it was required. He stated that the officer was unsure if the documents could be lodged and said Mr Lu would need to speak to her supervisor. Ms Cheng in her evidence confirmed Mr Lu's account of the conversation.
Mr Lu stated that he and Ms Cheng telephoned Fair Trading again and spoke to a manager. The person they spoke to advised him to make a fresh application for an operator licence as that would be quicker. He stated that the manager did not discuss the transitional provisions with him and did not advise him that he would not be able to operate the tattoo parlour while a new application was being assessed. Ms Cheng confirmed the content of the conversation in her evidence to the Tribunal.
Mr Lu made his second application for a licence on 1 July 2016. Mr Lu believed he could continue to operate the tattoo parlour until his application was determined. Under the Act, however, he was not permitted to operate the tattoo parlour pending determination of his application. There is no dispute that he did continue to operate the parlour until he received notice on about 6 February 2017 that his second application had been refused, at which point he closed the shop.
Constable Ivan O'Donnell, NSW Police, gave evidence that on 9 November 2016 he attended Mr Lu's tattoo parlour, Monkey Toys Tats, where he observed staff performing tattooing work. When he asked Mr Lu for his operator licence, Mr Lu produced his application for the licence and, when questioned, said he was just waiting for the licence to be sent to him. Constable O'Donnell made inquiries the next day and was informed by the Security Licensing Enforcement Directorate (SLED) that a licence had not yet been approved for Mr Lu.
Constable O'Donnell went back to the tattoo parlour on 17 November 2016 and spoke with Mr Lu. He stated that he advised Mr Lu that he did not have an operator licence and that his 2016 application did not allow him to operate a tattoo parlour. Constable O'Donnell advised Mr Lu that it was an offence to trade without an operator licence and that he may be fined. This warning to Mr Lu does not appear in Constable O'Donnell's notebook entry relating to this visit to the tattoo parlour but is contained in the COPS event entry which was recorded on 24 November 2016. At hearing, Constable O'Donnell was adamant he told Mr Lu on 17 November 2016 that he could not operate the tattoo parlour.
Constable O'Donnell returned to the tattoo parlour on 30 November 2016 and issued Mr Lu with an Interim Closure Order under s 28 of the Act. He stated that he told Mr Lu the interim order was for 72 hours and that Mr Lu could not operate after the 72 hour period unless he had an operator licence. This statement is not recorded in his notebook but appears in the COPS event entry recorded on 6 December 2016. Constable O'Donnell states he told Mr Lu that he needed to contact Fair Trading about his application for the licence.
Mr Lu states that Constable O'Donnell did not tell him he could not trade after the expiry of the 72 hour period. Ms Cheng stated that she was present when Constable O'Donnell served the Interim Closure Order on 30 November 2016. She stated that she asked Constable O'Donnell to explain what the order meant and he said he didn't know exactly. In her evidence at the hearing she said she read the order again after Constable O'Donnell left and thought it was clear that Mr Lu could trade again after 72 hours. Constable O'Donnell acknowledges he could have applied for a permanent closure order from the Local Court, but did not. However, the Commissioner states that it is usual practice to serve an Interim Closure Order rather than obtain a permanent order.
Both Mr Lu and Ms Cheng said that Constable O'Donnell said they should contact Fair Trading. They did not.
[9]
False and misleading statements made to police officers
The Commissioner alleges that Mr Lu has made false and misleading statements to police officers on two occasions.
The first allegation relates to the visit to the tattoo parlour by Constable O'Donnell on 9 November 2016. It is alleged that Mr Lu made a false statement about cash in his wallet.
Constable O'Donnell's evidence was that there was no cash register, EFTPOS or credit card facilities at the premises for payment. He observed a large amount of cash, comprising predominantly $50 notes, in Mr Lu's wallet when he asked Mr Lu for identification. When Constable Anderton, who was with Constable O'Donnell, commented that Mr Lu had a lot of cash, Mr Lu responded that he had won it on the pokies at the pub downstairs from the tattoo parlour. Constable O'Donnell subsequently attended the Crystal Palace Hotel which is situated below Monkey Toy Tats where an inspection of records of gaming winnings indicated there were no significant cash payments made that day.
Mr James Lane, manager at Crystal Palace Hotel, gave evidence that he does not recall the police officers inspecting records for cash payments for gaming machine winnings on that day and there was no log of such an event in his shift report, as would be normal practice. The General Manager, Mr Simon Tsui, states that a player's name and signature are recorded where a cash redemption is $1,000 and over.
Mr Lu stated that he won the money from several machines. He did not recall how much he had won but it was in several amounts, each of which was less than $500.
The Commissioner alleges that Mr Lu told the police he had won the money on the poker machines to disguise the fact that he was operating the tattoo parlour (and receiving cash payments) while unlicensed.
The second allegation relates to an inspection of Monkey Toy Tats by police on 30 November 2016. It is alleged that on that date Mr Lu made a false statement about his employee performing tattooing work for profit. During the inspection police observed what they believed to be a tattooist working on a tattoo on the left forearm of a customer. When asked by police whether tattooing procedures were being carried out at the premises at the time of the inspection, Mr Lu said that there weren't and the apprentice was practising on his friend. When police questioned the person who was said to be the friend of the apprentice, he said he did not know the tattooist.
Mr Lu said that he did not fully understand what he was being asked on that day and was nervous because the police were there. He said his experience of being in China was that you deny things when asked questions by police.
Mr Lu denied that he had told police that an apprentice was practising tattooing on his friend to disguise the fact that he was operating a tattoo parlour without a licence.
[10]
Failure to declare close associates
Under the Act a person who is applying for a licence must disclose information about any close associates. "Close associate" is defined in s 4 of the Act as follows:
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).
In the first application for an operator licence Mr Lu did not complete the section of the form in which he was required to declare close associates. In a statement dated 9 May 2017, Mr Lu states that he did not declare any close associates as there were none. The Commissioner states that Mr Lu failed to declare Mr Doueihi as a close associate and failed to declare any employees.
Mr Lu was questioned extensively at the hearing about the contract he entered into with Mr Doueihi when he bought the tattoo business. A copy of a contract was in evidence before the tribunal but Mr Lu gave equivocal evidence about whether that was the contract he signed. He said the contract was handled by a lawyer who advised him that it settled in September 2013. The copy of the contract in evidence shows a purchase price of $40,000 with a $20,000 deposit and $20,000 balance.
In February 2016, Mr Lu reported an incident to police in which three men came to the tattoo parlour and asked for money. The men said he owed Mr Doueihi $140,000. Mr Lu explained to police that he had purchased the business from Mr Doueihi for $100,000 and had paid $20,000 up front. He paid $80,000 to Mr Doueihi over the next year. According to police, Mr Lu told them that, once the $100,000 was paid in full, Mr Doueihi also required Mr Lu to pay him $2,000 per week. He told police he had started to pay the $2,000 but after about two years, told Mr Doueihi that he would not pay any more. Mr Lu told police that he suspected the men were sent by Mr Doueihi. Police also record that Mr Lu said he suspected Mr Doueihi is associated with the Hells Angels Outlaw Motorcycle Gang.
At the hearing Mr Lu denied that he had told police he had started paying Mr Doueihi $2,000 per week. He said that the police had misunderstood what he had said. He confirmed that the price for the business was $100,000 and that he verbally agreed to pay an ongoing fee of $2,000 per week, but said he never paid the fee to Mr Doueihi.
Mr Lu said that he did not believe Mr Doueihi was a close associate. He said that after Mr Doueihi had sold him the business, he had nothing further to do with him.
[Not for publication]
The Commissioner states that Mr Lu failed to include employees and tattooists in his application. The Commissioner referred to a Facebook post from 9 October 2013 which stated the tattoo parlour had been renamed but it was the "same crew (with a few additions) and same location" and gave the names of six people, including Mr Lu.
The evidence of Mr Lu was that there were two tattooists working at the Haymarket shop before he bought it. Other tattooists were shared between the three shops owned by Mr Doueihi. He said that when he filled out the licence application form in September 2013, he did not know who was going stay or who was going to leave, so he did not include any of the tattooists. He said that when he filled in the form three of the tattooists named in the Facebook post were not there. He did not know that he was required to provide further information to Fair Trading if there were new employees.
In relation to the second application, Mr Lu disclosed one employee, Ms Cara Tigerlily. The Commissioner states that Mr Lu failed to disclose at least two other employees - Mr Thomtoum Phuket and Ms Xin. In relation to Mr Phuket Mr Lu stated in his written statement that he did not list him at Mr Phuket's request for what he suspected were visa-related reasons. At the hearing, however, he said that he did not list Mr Phuket because he thought he did not have to list anyone who was licensed. Mr Lu acknowledged that he declared Ms Tigerlily and that she was licensed at the time.
In his written statement Mr Lu said he did not list Ms Jia Xin Chen because she misled him and told him she had applied for a tattoo licence. At the hearing he said he fired her on the day he filled out the form because he found out she did not have a licence. Ms Chen commenced work again once she had a licence but Mr Lu did not disclose that to Fair Trading as he did not think he had to.
[Not for publication]
When questioned about his understanding of the information provided on the application about close associates, Mr Lu said he thought he understood his obligations as his wife translated the form for him. He did not make any inquiries of Fair Trading.
The respondent states that Mr Lu deliberately breached the rules concerning the disclosure of close associates. Mr Lu states that he misunderstood his obligations primarily because of his poor English skills.
[11]
Failure to keep a log of tattooing work
It is a requirement under the Tattoo Parlours Regulation 2013 that a tattoo parlour operator must cause a contemporaneous log to be kept of all tattooing procedures, including date on which the procedure was performed, the identity and licence number of the tattooist and any amount that was charged. The log is to be written in English and kept at the premises. The respondent alleges that Mr Lu has failed to keep such a log, despite being reminded by police of the obligation to do so in July 2013, November 2016 and January 2017.
Constable O'Donnell states that when he attended the tattoo parlour on 9 November 2016, Mr Lu told him he did not keep records of each tattoo performed.
Mr Lu stated that all tattoo bookings are logged in an electronic calendar. He said that all customers' details are electronically logged before they are tattooed. He said that the customer log is kept off site but accessible electronically in the shop. Mr Lu said that he told Constable O'Donnell that he logged all customers' details and offered to turn the computer on, but Constable O'Donnell said "that's fine".
Mr Lu produced some logs but said at the hearing that the log only showed bookings made in advance, not walk-ins. Mr Lu undertook to improve his record keeping.
[12]
Breach of health and safety regulations
Persons who are performing tattoos are required to wear protective clothing. Constable O'Donnell states that when he visited the tattoo parlour on 9 November 2016 he observed two tattoo artists performing skin penetration procedures and neither was wearing a clean gown or apron during the procedures.
Mr Lu agrees that the tattooists should have been wearing gowns which he states were available. He states that the tattoo parlour has been inspected regularly by the City of Sydney health inspection team and there has never been a health related incident.
[13]
Other breaches of the law
The Commissioner states that Mr Lu has shown a disregard for the law and was issued with ten traffic infringements between 2006 and 2016. These have included offences such as speeding, disobeying traffic lights and driving with a low range concentration of alcohol.
[14]
Other evidence
Mr Lu stated that he is suffering financial hardship as he is still paying rent for the tattoo parlour premises and his wife is no longer working. He stated rent for the premises is $4,500 per month and he has personal expenses of about $1,200 per month. He also pays a mortgage of about $4,000 per month.
Mr Lu also provided character references which attest to his good character and reputation.
[15]
Conclusions
Mr Lu acknowledges that he made some mistakes in his dealings with police and the running of his business during the period in question. He states that his language difficulties have contributed considerably to his misunderstandings. He states that he made some errors of judgement in not disclosing all staff in his second application. In relation to the first application, he states that it was reasonable to not declare staff as the situation at the time was fluid and he did not know which staff would be employed in the Haymarket shop.
Mr Lu states he is determined to fully comply with the legislation in the future. While he has been a careless driver in the past, he states he has no history of hard crime and has a good reputation in the community as well as being an awarded tattoo artist.
Mr Lu states he did not receive any correspondence from Fair Trading between 2013 and 2017 was unaware of any decision which meant that he could not operate his business until he received notification that his second application was refused in February 2017. He immediately closed his business and has now addressed any administrative issues concerning logs and financial records.
Mr Lu gave evidence about his financial position as he has not been able to operate the business since early February 2017. However, any financial hardship that will be occasioned by the decision is not relevant to the assessment of a person's fitness and propriety (Austin v Commissioner for Fair Trading & Commissioner of Police [2016] NSWCATAP 179 at [73]; Lal v Director-General, Department of Transport [2001] NSWADT 74 at [47]).
The Commissioner states that Mr Lu's repeated breaches of the Act in circumstances where he had received a clear warning as to his obligations is demonstrative of an attitude whereby he is willing to breach the provisions of the Act if it suits his personal interests.
While I accept that Mr Lu's first language is not English and that he may not have been fully conversant with his obligations and responsibilities under the Act, it is apparent from the evidence that he failed to comply with the provisions of the legislation in a number of ways.
The most serious allegation is that Mr Lu operated without a licence for some time. He was permitted to continue to operate while his 2013 application was being assessed, but not after it was treated as withdrawn in September 2015. I do not accept that Mr Lu did not receive any of the letters sent to him between 24 September 2013 and September 2015. Mr Lu has sought to cast doubt on whether or not the letters were in fact posted. It is possible that one letter may have not been posted or gone astray. It is extremely unlikely that all four letters failed to reach the Ashfield address.
I agree with Mr Lu that service by email is not effective service. I make no finding in respect of the email sent to him on 12 August 2015. I do find, however, on balance that he was effectively served by post with the request for further information and notification of the deemed withdrawal. Whether he read those letters or read them and ignored them is not to the point.
I find that Mr Lu's account of being told by Fair Trading in early 2015 that his application was 'being processed", rather than that he was required to provide further information, implausible in light of the evidence about how such telephone calls are dealt with by Fair Trading staff and the information available from the GLS system. This casts doubt on whether the telephone call was ever made.
I find that it is plausible that in 2016 Mr Lu was told by a Fair Trading officer it would be simpler for him to lodge a fresh application rather than go through a review process in relation to the 2013 application. It is also possible that Mr Lu may have thought that he could continue to trade as he had been doing while his first application was being processed. I accept that his English language skills may have meant that he was not always able to understand the subtleties of legal requirements. However, he did have an obligation to ensure that he complied with the law and that he was fully aware of his obligations. At no time did he seek advice about that.
The letter of 24 September 2015, which I have found, was received by him, made clear that a person could not trade without an operator licence. In addition, I accept the evidence of Constable O'Donnell that that he advised Mr Lu on 17 November 2016 that he could not trade without a licence. Mr Lu continued to do so.
I accept that wording on the Interim Closure Order issued on 30 November 2016 is not particularly clear. However, I accept Constable O'Donnell's evidence that he made clear to Mr Lu that he could not re-open after the expiry of the Interim Closure Order. I consider that Mr Lu and Ms Cheng were not truthful about their conversation with Constable O'Donnell. In any event, even if they were under a misapprehension, again, it was their responsibility to be aware of their obligations. Constable O'Donnell advised them to talk to Fair Trading, but they did not do so.
In summary, I find that Mr Lu operated a tattoo parlour without a licence for a considerable period of time in circumstances where he either knew he was not permitted to do so or where he ought to have known that to be the case.
The evidence about whether Mr Lu lied to police when he said he had won money on the poker machines at the pub downstairs when questioned by police on 9 November 2016 about a substantial amount of cash in his wallet is equivocal. There is no doubt that Mr Lu ran a cash business at the time as he did not have EFTPOS or credit card facilities. It is somewhat implausible that he won the money on the poker machines that day, but I make no finding in relation to the allegation that he lied to police to disguise the fact that he was running a tattoo parlour whilst unlicensed.
Mr Lu has acknowledged that he misled police on 30 November 2016 when he stated an apprentice was practising on his friend for free. It is not clear whether he did that to disguise the fact the tattoo parlour was operating. It is clear, however, that by that date he knew that he could not operate the parlour without a licence.
Mr Lu failed to declare close associates on both applications for the operator's licence (contrary to s 12 of the Act) and to update that information when other staff commenced work at the tattoo parlour. His explanations for why he did not declare particular people to be close associates on either application are sometimes disingenuous and at others contradictory.
At the time he made the first application Mr Lu's own evidence is that he owed Mr Doueihi the balance of the purchase price and that he had agreed to pay Mr Doueihi $2,000 a week on an ongoing basis. Mr Lu's statement that he believed that, after he bought the tattoo parlour, he had nothing else to do with Mr Doueihi, is disingenuous in these circumstances. His evidence that he did not pay Mr Doueihi $2,000 a week is at odds with his own statement made to police in February 2016.
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Mr Lu was also aware that Mr Doueihi was associated with the Hells Angels Motorcycle Gang. There is no suggestion that Mr Lu is himself associated with the Hells Angels.
I am satisfied on the basis of the evidence presented at the hearing that in relation to both the first and second applications Mr Lu failed to declare employees or contractors who were working at the tattoo parlour at the relevant times. Mr Lu's explanations for why he included one tattooist but not others in his second application were contradictory and unsatisfactory. He stated that he thought if a tattooist was licensed he or she did not need to be included, but then stated he did not include Ms Chen because she was unlicensed while Ms Tigerlily, who was included, was licensed.
The evidence of Mr Lu concerning the keeping of logs as required was most unsatisfactory. The calendar extracts produced to the tribunal clearly do not contain records of all tattoos performed. Mr Lu stated this log only contained bookings in advance and not walk-ins. No records were produced which showed compliance with requirements to log all tattoos. I do not accept Mr Lu's statements that records are kept of all customers' details nor do I accept that he offered to turn the computer on so Constable O'Donnell could view the records. I prefer the evidence of Constable O'Donnell that Mr Lu said he did not keep records of all tattoos.
Mr Lu acknowledges that he should have been more vigilant in ensuring that staff complied with health and safety regulations by wearing gowns or aprons when performing tattoos. I note his statement that the parlour has passed health inspections and there has never been a health related incident. His driving infringements are also acknowledged.
I agree with the respondents' submissions that Mr Lu has shown a disregard for the laws concerning tattoo parlours over a sustained period and continued to do so despite being clearly informed by Police that he could not continue to operate. I accept that Mr Lu does not have good English skills, but that fact does not excuse his behaviour. His lack of English and poor understanding of the law made it even more important that he took steps to ensure that he was aware of his obligations. He did nothing of the sort. While he has stated that he now understands what is required and will take the appropriate measures to ensure he complies with the law, I cannot be satisfied that he will.
Mr Lu showed a tendency to tailor his evidence to put himself in the most favourable light to the point where he was prepared to give untruthful evidence to the Tribunal. I cannot therefore be satisfied that that he would conduct himself with honesty and integrity in the future, despite the views of those who have provided him with character references for these proceedings.
There may well be a point in the future when Mr Lu gains the reputation and business knowledge that would be required to satisfy the authorities that he would in the future comply with the law. However, at this point in time I cannot be satisfied that he would adhere to all of the requirements of the licensing scheme. I therefore find that Mr Lu is not a fit and proper person to hold an operator's licence. In such circumstances, where the public must have faith in the integrity of the licensing scheme, neither would it be in the public interest for Mr Lu to be granted a licence.
[16]
Order
1. The decision under review is affirmed.
[17]
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
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Decision last updated: 25 January 2018