Austin v Commissioner of Fair Trading (CFT) and Commissioner of Police (CoP) [2016] NSWCATAP 179
Constantin v CoP [2013] NSWADTAP 16
Deakin v CFT and CoP [2016] NSWCATAD 2
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Source
Original judgment source is linked above.
Catchwords
Austin v Commissioner of Fair Trading (CFT) and Commissioner of Police (CoP) [2016] NSWCATAP 179Constantin v CoP [2013] NSWADTAP 16Deakin v CFT and CoP [2016] NSWCATAD 2Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321Blisset v CoP [2006] NSWADT 114CoP v Toleafoa [1999] NSWADTAP 9Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127
Lal v Director-General, Department of Transport [2001] NSWADT 74
McCurday v CFT [2017] NSWCATAD 35
Melbourne v R (1999) 198 CLR 1
Mielczarek v Commissioner of Police [2016] NSWCATAP 255
Murphy v Chief Commissioner of State Revenue [2012] NSWADT 221
Pillai v Messiter (No. 2) (1989) 16 NSWLR 197
Project Blue Sky Inc. v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355
Saadieh v Director-General, Department of Transport [1999] NSWADT 68
Smith v Commissioner of Police and Commissioner of Fair Trading [2014] NSWCATAD 184
Judgment (16 paragraphs)
[1]
or publication]"are not for publication or for release to the applicant or the first respondent.
[2]
REASONS FOR DECISION
The applicant Mr Steven McDonald applied to this tribunal on 25 July 2017 for review under s 27(1) of the Tattoo Parlours Act 2012 (TP Act) of a decision made by the first respondent on 20 July 2017 refusing his application for the grant of an operator licence pursuant to s 16(1) of the TP Act.
The applicant Mr McDonald is the sole director and shareholder of Carnival of Carnage Tattoo Studio Pty Ltd, which conducts a tattoo parlour known as "Carnival of Carnage" in Fitzgerald Street, Windsor. On 24 September 2013, the applicant lodged an application with the first respondent, Fair Trading, for an operator licence in accordance with s 11 of the TP Act. As the application was lodged before 1 October 2013, Mr McDonald was entitled to operate a tattoo parlour until he was notified that the application had been refused or treated as withdrawn.
Fair Trading referred the application to the second respondent, the Commissioner of Police, for investigation and determination in accordance with s 14(1)(b) of the TP Act. The Commissioner duly made enquiries about the applicant, and a delegate made a determination and report pursuant to s 19(1) of the TP Act on 17 July 2017 to the effect that the applicant is not a fit and proper person to be granted a licence and that it would be contrary to the public interest for a licence to be granted, by reason of the applicant's disregard for licensing legislation. That determination constituted an adverse security determination (ASD) in relation to the applicant. On the same day the Commissioner provided Fair Trading with a notice of information relevant to the exercise of the function under s 16(1) and s 36(1) of the TP Act stating that the applicant is not disqualified from holding a licence, permit or other authority under other legislation.
A delegate of the Commissioner informed the applicant on 20 July 2017 of the decision to refuse the grant of an operator licence, and provided the applicant with a statement of reasons. When the Commissioner of Police makes an ASD, the decision to refuse a licence under the Act is mandatory: s 16(3)(c). The applicant filed his application for a review on 25 July 2017, and on the same day sought a stay of the decision.
At the first hearing on the stay application on 27 July 2017, the applicant learned that the ASD had been based, inter alia, on his failure to comply with the regulatory regime to date, including by failing to identify Matthew Austen a close associate, failing to declare Mr Austin's partner, Karlie Ryan-Norman, as a close associate, and failing to declare tattooists Andrew Bolton and Joshua Gilbert. The decision was stayed until 5 September 2017, at which time the matter was listed for a further stay hearing. In his evidence at the second stay application hearing on 5 September 2017, the applicant testified that Mr Austin had been the applicant's "business partner" (in fact he was a shareholder and director of the company), but had been removed as a director when he was refused a tattooist licence. He further testified that Mr Bolton and Mr Gilbert no longer worked at the parlour and that his failure to declare Karlie Ryan-Norman (who works as a body piercer at the parlour) as a close associate was an oversight as he had not realized that the legislation required all persons working at the parlour to be notified as close associates, not just tattooists.
The applicant's evidence at the stay hearings was to the effect that Mr Austin had had no role and no financial interest in the parlour since the date he was refused a licence and that the applicant had misunderstood his obligations under the TP Act with respect to declaring close associates. He had now, however, corrected any errors in the "paperwork" and said that any breaches of licensing legislation, including traffic violations, were minor and did not result in his not being a fit and proper person to be granted an operator's licence. At the second stay hearing on 5 September, Montgomery SM stayed the operation of the decision until the hearing on the merits on 24 October 2017.
At the commencement of that hearing, Mr McDonald said he was "shocked" that the matter had not been listed before Montgomery SM, saying that Montgomery SM was familiar with the facts by reason of having heard both stay applications and, moreover, appeared sympathetic to his case as he had granted both stays. After a little discussion the hearing proceeded as listed.
[3]
Applicable legislation
This tribunal has jurisdiction to review the decision by virtue of s 27(1)(a) of the TP Act, which provides that a person may apply to the tribunal for an administrative review under the Administrative Decisions Review Act 1997 (ADR Act) of the refusal or failure of the first respondent to grant a licence to the person.
Section 27(3) deals with the nature of the tribunal's function. It provides as follows:
(3) If an application for a licence or for the renewal of 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 or a close associate of the applicant:
(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.
The tribunal thus has a discretion to grant a licence despite an ASD. There is, however, no express power to review the ASD itself.
Of particular relevance in this case is s 12(1)(b) of the TP Act, which provides that an application for an operator licence is to be accompanied by a written statement in respect of "close associates". The term "close associate" is defined in s 4 as follows:
(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.
(4) In this section:
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).
relevant position means:
(a) the position of director, manager or secretary, or
(b) any other position, however designated, if it is an executive position.
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.
[4]
Applicant's evidence in chief
At the hearing the applicant adopted his statutory declaration dated 1 September 2017 (part exhibit A1) in which he declared inter alia that he is the only person who has finances tied up in Carnival of Carnage. It is his small business and no other parties or persons are involved, other than himself, as there is no partnership, nor are there any persons who have helped him financially other than himself. Definitely he has no connections with gangs or outlaws or organized crime in any way. He had Matthew [Austin] listed originally, only so he would be able to act on his (Mr McDonald's) behalf, as he was going to manage the shop for the applicant. Once his licence refusal was finally determined after several appeals, it became clear that the applicant was not going to be able to have Matthew at the shop in any capacity. He resigned from the business in all forms. He made no money by resigning, because as a friend he knew that it was the applicant's shop, he had opened it and had done so with his own money. Consequently nothing was owed to him at all.
Other than some minor traffic offences, which he believed most drivers would have after 17 years of driving, he believes he is a good, fit and proper person and a positive contributing member to society, whether in everyday life or as a tattoo parlour operator. "I am absolutely and extremely offended to be told I'm a danger to the public for any reason as I know I'm not and it borders on defamation of my character I believe". He had Matthew Austin as a manager and tattooist until his licence was refused. He sent the letter as asked and received no notification at all that it was not received.
Matthew had been at the shop occasionally, as Karli Norman, his partner and the mother of his children, was working a couple of days a week as a body piercer at the parlour. He ceased that arrangement immediately after receiving the notice to refuse licence letter.
At the last NCAT hearing by telephone, while he was in hospital and under duress because of pain and heavy medication, he actually broke down in tears as the amount of stress that the proceeding had placed on him which, he believed, was not warranted, especially being told that he is a danger to the public as a tattoo parlour operator. He had explained that he had misunderstood the legislation and rectified the situation immediately by informing Karli that her working there was not allowed. She was not aware of the legislation at all, and he had thought it was only for tattooists, but now understands it is for anyone working at the shop in any role.
[5]
Cross-examination of applicant
Mr McDonald said he had read the information on the TP Act before lodging his application, but had made mistakes. He understood that the legislation was aimed at excluding criminal elements from the tattoo industry and he supported that objective. Outlaw motorcycle gangs (OMCGs) are part of that criminal element, and tattoo parlours were rumoured to be operated by some persons associated with them. He was not himself a member of an OMCG, but was aware that Matthew Austin was connected to such a group, and while not a member of an OMCG himself, he had worked for a gang member at the Naked Gun tattoo parlour, though he had not been an owner of that business. The applicant had known Mr Austin since they were 10 years old and were living in the same neighbourhood.
He agreed that breaches of the law would render a person not fit and proper to hold a tattoo licence, such as by employing an unlicensed person, but added "Nobody's perfect, but now I understand". He acknowledged that the reasons given by Fair Trading for refusing his licence were that he was not a fit and proper person to hold a licence and it was not in the public interest for him to do so, given his disregard for licensing schemes, especially in relation to tattoo parlours. He had failed to declare Karli Ryan-Norman, Andrew Bolton and Joshua Gilbert as close associates as they were working for him, but took the view that he had only made a mistake in relation to Karli, as she was working as a body piercer and he had thought that only tattooists had to be declared. Andrew and Joshua had not been working for him at the time of the application.
Similarly, he had declared Matthew Austin only a as tattooist, but not as a director of the company, because he had not held that position at the time of the application. There had been no other problems with his application at the time, as far as he knows, except that he had omitted to sign it. He had therefore signed the declaration on 1 November 2013 (exhibit R1, p 25) and had believed it to be true at the time. He had received Fair Trading's letter of 12 May 2015 informing him that Mr Austin's tattooist application had been refused and advising that he should no longer employ him a tattooist and should inform the Chief Executive in writing to remove the employee as an employed tattooist or proposed employed tattooist from his application for an operator licence. He had not updated his application as he had misinterpreted the requirements and had not been aware that the application had to be updated.
[6]
Blake Ryan Norman
The applicant's bundle of documents (exhibit A1) included two statutory declarations, one by Blake Ryan Norman and the other by his sister Karli Ryan Norman. They were apparently tendered at the stay hearings, but the applicant did not refer to them at the substantive hearing. Nevertheless, I think they should be summarized as relevant parts of the applicant's case.
Blake Ryan Norman's statutory declaration dated 1 September 2017 stated inter alia that he had worked at the Carnival of Carnage Tattoo Studio as an artist and it was a great place to work. The owner Steven McDonald had done a great job to make it as friendly and welcoming as possible. His sister Karli had been working at the studio a couple of days a week for a few hours doing piercing. He believes a misinterpretation on Steven's part led to his operator licence being in jeopardy of refusal. He had also thought the same way as the applicant did, otherwise he would never have allowed his sister to compromise the business and Steven's operator licence, as he did not want to have to work at another parlour. Her partner Matthew Austin was bringing her to the parlour to do piercing, and also just to visit him sometimes and bring his nephew and recently born niece. Matthew worked at the shop before being refused, and worked in the Windsor area long before Steven opened the shop. Some people still say to this day that they think Matthew still works there and still telephone him to ask for appointments. They just politely advise that he no longer works there and offer the customers another artist. He still asks Matthew for advice on jobs he does, or any new techniques he can try, as he is much more experienced, but he receives no benefit from doing so as he is a friend helping a friend.
Andrew worked at the studio for a couple of months. He had his tattooist licence but was very unreliable and Steven was always asking him to hurry up to complete his close associate forms, but he was just too difficult to deal with and was caught smoking in the car park. Steven terminated him.
As regards Joshua Gilbert, he stopped working at the parlour long before the licence laws came into effect. The police came to the shop after the laws came in, and Joshua was visiting the shop, but he did not remember him showing his licence. Steven has since told him that he spoke to Josh and Josh said he did show it, as he felt intimidated, but did not think to mention to the police that he was only visiting and not working at the shop. Many people still asked for Josh after all these years, so (the deponent said) he knew Steven came up with a plan to say Josh was working in the studio on a Facebook post, so that his old customers would come up and they would say he was not available and offered to help them with the tattoo they wanted, which worked out well for all of them. He knows that Steven would never imagine this would get used against him in relation to his operator licence. Steven had told him that he had since spoken to Joshua Gilbert and informed him what he had done. Josh accepted it all, as he had moved away and did not need those customers any more.
[7]
Karli Ryan-Norman
Karli Johanna Ryan-Norman's statutory declaration dated 1 September [2017] states that she was not aware that she needed a close associate form in order to work at Carnival of Carnage Tattoo as a body piercer. Matthew Austin does not work there and to the best of her knowledge does not have any interest in the shop. He only takes her to the shop to see her brother and also takes her to work there, as she only has her learner's permit.
Since finding out that she needed a close associate form, she has filled out the proper paperwork and lodged it with Fair Trading and has not worked since she found out the true position.
[8]
Applicant's references
The applicant's exhibit A1 included three references which, although not referred to at the main hearing, should also be noted. The first is from Manuel Portelli, dated 14 September 2017 states inter alia that the declarant is aware of the issues before the tribunal. He has known the applicant for over 20 years when they first met in primary school. He is convinced that the applicant was unaware of the legislation and would not risk his business. Mr Portelli had always known him to be an honest and hard-working person. He had always looked up to him and had worked with him on the M7 freeway. Steven worked in the control room and he was part of the incident response team. Steven was in charge of controlling incidents on the road and liaising with police, fire and ambulance services.
Steven had informed him that he had misinterpreted some of the legislation but now understands that he made mistakes. Mr Portelli was confident that he would not repeat them, and any event making mistakes is how one learns when starting a small business. He remembers Steven telling him how happy he was about when the new tattoo laws came into force, as it would get the bad people out of the industry, and how much that would benefit him and the artists.
Refusal of his licence would ruin him financially and it would be very hard for him to get back on his feet if the shop were closed down. It would bankrupt him and people would lose their jobs. It was heartbreaking for him at not simply because Steven is a good friend, but because he knows the applicant takes care of his elderly mother and supports his sister with five children. Steven is always doing something with his nephews and nieces and has always been a big part of their lives.
He is confident that this has simply been a misunderstanding from both sides. Steven does his part in the community as he coached kids' football teams. He is a law-abiding citizen and a good friend who has helped Mr Portelli countless times.
Diane Fisher's reference dated 16 September 2017 states that she has known the applicant for about 14 months and during that time has found him to be a reliable, honest and trustworthy person. She is aware that he is fighting to keep his tattoo business open because he did not follow the legislation regarding close associates. She believes his failure to comply with the legislation was due to the fact that he had misunderstood it and its requirements. She believes him to be a fit and proper person to have such a business and that in the future he will seek a proper understanding of all legislation and comply with it.
[9]
Ms Judith Baker
The respondent called Judith Amelia Baker, the accountant for the applicant and his company, to give oral evidence by telephone. Ms Baker adopted her letter of 11 August, 2017 (exhibit R6, p 214) in which she stated that as the accountants for Carnival of Carnage Tattoo Studio, S6 Accounting Pty Ltd established the proprietary company on 24 May [actually March] 2015, with both Matthew Austin and Stephen McDonald as directors and shareholders, in anticipation of a licence being granted.
When the licensing authorities declined to grant Mr Austin a tattooist licence and he was contesting the refusal of the licence, they did not think he had to be removed as a director and shareholder of the company until the licensing matter was finalized, only that he was not permitted to work for the company as a tattooist.
Once it was brought to his attention, Mr McDonald advised the firm (S6 Accounting) that Mr Austin could no longer be a director or a shareholder of the company, so he resigned as a director and shareholder immediately and ASIC was notified that he was no longer a director or shareholder of Carnival of Carnage Tattoo Studio Pty Limited.
In further evidence in chief, the witness explained that the company did not take over the business immediately on its registration but remained dormant until the start of the new financial year on 1 July 2015, so that there would not need to be two sets of tax returns and other reports for the 2015 year. Asked why Mr Austin was granted two shares and the applicant only one, she explained that it was intended as an incentive to Mr Austin to work harder. He was not required to make any payment, out of gratitude for his hard work. All the amounts shown as being for "professional fees" (e.g. exhibit R6, p 245) went to the artists, and the applicant received no additional remuneration.
Ms Baker had not discussed with the applicant the need to notify Fair Trading of the change to corporate form for the purposes of the TP Act. At the time she was unfamiliar with the tattoo parlour legislation. As her letter of 11 August explained, she had not thought that Mr Austin needed to be removed as a director and shareholder. She had become aware of that requirement for the first time as a result of Mr McDonald's telephone message of 11 December 2015.
She had noted in her letter of 3 October 2017 to NCAT that Mr Austin's resignation from the company had been copied to her at the time, following the applicant's telephone message of 11 December 2015. That the notification of the change had not been lodged with ASIC until 22 July 2017 resulted from an oversight on her part. She became aware of the matter following Mr McDonald's telephone message of 22 July 2017 (part exhibit R7) alerting her that the notification of Mr Austin's resignation as a director and shareholder had not been lodged. There was also an error in the 2017 tax return resulting from the fact that the schedule relating to continuity of majority ownership should have been altered.
[10]
Applicant's submissions
Mr McDonald referred to McCurday v Commissioner of Fair Trading [2017] NSWCATAD 35 in which the tribunal had decided that a tattoo operator licence should be issued to an applicant who had been a senior member of the Comanchero OMCG and had convictions for assault and other offences. He also cited Deakin v Commissioner of Fair Trading and Commissioner of Police [2016] NSWCATAD 2, which determined that an operator licence should be issued to a man with a criminal record and a history of mental health problems and an antagonistic attitude to police.
His problem had been lack of understanding and he realized it was his fault because he did not know the tattoo parlours law. He represents no danger to the public, unlike the applicants in Deakin and McCurday. He is happy that criminal elements are being excluded from the industry. He had read the legislation when he had applied for his licence in September 2013, but was wrong about close associates. He did not hide the fact that Karli was working at the studio, but had been unaware that she was considered a close associate even though she was not a tattooist. He had not known that he should have reported Matthew Austin's appointment as a director and shareholnder after the application had been lodged. He had been intending to declare Joshua Gilbert [it appears the applicant may have meant to say Andrew Bolton].
He was trying to fix his mistakes. He had relied on his tax agent but had been naïve and now realized that he should have kept proper records. His record of traffic infringements was minor, and he still held his security industry licence. The process he had undergone had made him a better person, but the respondents were trying to drag his name through the mud. He was not in any way associated with an OMCG, represented no danger to the public and complied strictly with health requirements. He was in regular employment but failure to grant him a licence would ruin him. The respondents' main argument turned on close associates, but the new owners of the premises refused to cooperate by completing a consent form. The problems with his tax returns had arisen only recently. He deserved a second chance.
[11]
Consideration
Under s 63 of the ADR Act, the tribunal's role is to determine whether, having regard to the underlying facts in the matter and the applicable law, the respondent's decision is the correct and preferable one. The tribunal is to review the merits of the original decision and consider the evidence available at that time, together with any other or later material, so as to affirm the original decision, vary it or set it aside: Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60, 77.
The applicant has applied for review of a decision taken by the Director-General of Fair Trading under s 27(1)(a) of the TP Act to refuse to grant him a tattoo operator licence. The Commissioner of Police made an adverse security determination (exhibit R2) under s 19(1) of the Act to the effect that the applicant was not a fit and proper person to be granted the licence and that it was not in the public interest for the licence to be granted. Pursuant to s 27(3), the Commissioner is a party to these proceedings.
The TP Act introduced licensing requirements for operators of tattoo parlours and tattooists which came into operation in November 2013. Two kinds of licence may be granted: an operator licence and a tattooist licence. Only an individual can apply for a licence, even where the individual is applying on behalf of an organization: s 11. The licensing regime imposes a test of whether the person is "fit and proper" and whether it would be "contrary to the public interest" to grant the licence. It is an offence to carry on a body art tattooing business without an operator licence: s 6.
A person may apply to the Director-General for an operator licence pursuant to s 11. Sections 12 and 13 provide for an application to be accompanied by a written statement in respect of close associates of applicants and for the fingerprinting and palm printing of applicants. On receiving an application for a licence, the Director-General is required by s 14(b) to refer the 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.
Section 19 requires the Commissioner to inquire into and determine, and report to the Director-General on, those matters. For the purposes of making his determination, the Commissioner may have regard to criminal intelligence reports or other criminal information held in relation to an applicant: s 19(3). Neither the Commissioner nor the Director-General is required to give any reasons for the determination for not granting a licence, if such reasons would disclose any criminal intelligence report or other criminal information: s 20. The Director-General has a discretion whether or not to grant a licence in some circumstances, but must not grant a licence if the Commissioner makes an adverse security determination in relation to the applicant: s 16(3)(c). Once granted, a licence remains in force for three years; it may not be renewed, but a new application can be made: s 17.
[12]
"Fit and proper person"
Conduct warranting a conclusion that an applicant is not a fit and proper person to hold a particular position need not constitute a deliberate departure from accepted standards, but may portray indifference or ignorance: Pillai v Messiter (No. 2) (1989) 16 NSWLR 197, [200] - [201]. The respondent's position is that the applicant's behaviour has not been truthful or timely but has been at best reckless.
The standard of fitness and propriety depends partly on the nature of the activity regulated by the licence. Thus, in Austin v Commissioner of Fair Trading and Commissioner of Police [2016] NSWCATAP 179, [79] the Appeal Panel said, "We accept that the standard of character required of a tattooist does not equate with the high standard of character required of, for example, a legal practitioner".
The respondents relied on a sizeable number of incidents or omissions as showing a pattern of failure to deal in a truthful and timely manner with the regulatory authorities. Some of those incidents or omissions were, however, credibly explained by the evidence as it unfolded. For example, the applicant's evidence that Joshua Gilbert had ceased working at the studio before the licensing requirements came into operation appeared to be contradicted by the fact that police had checked his licence at the studio on 12 February 2015. It appeared, however, that Mr Gilbert had merely been visiting the parlour but had produced his licence for inspection when asked by the police because he had felt intimidated by them.
Again, the continued appearance on social media of Matthew Austin's mobile telephone number, which had been posted on social media accounts when Mr Austin had been managing the business, appeared to an extent to be beyond the applicant's control, as he had made efforts to remove it but it continued to appear in social media posts when he conducted Google searches of the business name.
The applicant also claimed that after receiving the letter in 2015 that Mr Austin's tattooist licence had been refused, he sent Fair Trading a letter by mail as his printer was out of action at the time, and he had no indication that no communication had been received until he was warned that his operator licence was being revoked. The respondents did not contradict that claim. Again, while Mr McDonald asked his accountant to arrange for the removal of Mr Austin as a director and shareholder on 11 December 2015, the instruction was not carried out as the accountant, who at the time was also unfamiliar with tattoo parlour legislation, thought that his removal was not required. The accountant also acknowledged that the misstatement in the company's tax returns concerning continuity of majority ownership resulted from an oversight on her part.
[13]
The public interest
The authorities establish that the phrase "public interest" imports a discretionary value judgment to be made by reference to undefined factual matters, confined only in so far as the subject matter and purpose of the legislation imply. The principles set out earlier in this context can apply equally to the TP Act: Mielczarek v Commissioner of Police [2016] NSWCATAP 255, [34] - [43]. In light of the object and purpose of the TP Act, the matters that may be considered include concerns relating to public protection, public safety and public administration in the licensing system: Constantin v Commissioner of Police [2013] NSWADTAP 16, [33]. The Appeal Panel noted in Mielczarek that "occupational regulatory schemes such as the TP Act not only directly protect the public from harm, but also help to preserve public confidence in the regulated activity and its members" (at [162]).
Public interest principles must thus be applied in light of the particular legislative purpose and context of the TP Act, which is to rid the tattoo industry of OMCGs and their influence, and of other criminal elements. The legislative scheme depends for its efficacy on the conscientious and timely documentation of "close associates", as defined, working in tattoo parlours.
In the present case the applicant has demonstrated a negligent attitude to the TP Act scheme by failing to ensure the disclosure of close associates, one of whom, Matthew Austin, had been refused a tattooist licence partly because of his extensive criminal history. He has committed numerous breaches of business names, consumer protection and motor traffic legislation, including violations involving dishonesty. In particular, he has admitted lying on social media that Joshua Gilbert was working at the business and using faked customer reviews in order to gain business. His history of repeated traffic infringements extending over 17 years, and despite multiple licence suspensions, suggests a limited ability to learn from his mistakes.
On the evidence he has links with OMCGs, but they do not appear to be direct or extensive. Nevertheless, the TP Act seeks to remove not only those associated with OMCGs, but also those who cannot be relied upon to abide by the law. The applicant's pattern of contraventions means that at present it would be contrary to the public interest for the applicant to be granted an operator licence, and I so find.
[14]
Conclusion
The applicant's record is not such as to preclude the possibility that he could make a successful application for an operator licence in the future if he can produce sufficient evidence to show that he can be depended on to comply fully with the regulatory scheme. At present, however, he does not meet the fitness and propriety and public interest tests. The decision under review must therefore be affirmed.
[15]
Order
1. Decision under review affirmed.
2. Stay of decision under review lifted.
3. Pursuant to s 64(1)(b), (c) and (d) of the Civil and Administrative Tribunal Act 2013,
1. the recording and transcript of the confidential hearing held on 23 October 2017 pursuant to s 49(2) of the Act,
2. confidential exhibit CR 9 with attachments, and
3. paragraphs in these reasons marked "[Not for publication]"
are not for publication or for release to the applicant or the first respondent.
[16]
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: 16 November 2017
Parties
Applicant/Plaintiff:
McDonald
Respondent/Defendant:
Commissioner of Fair Trading
Legislation Cited (3)
Consumer Law Business Names Registration Act 2011(Cth)
The issues in the present case are thus whether the applicant is (a) a fit and proper person to be granted an operator licence or (b) whether it would be contrary to the public interest for the licence to be granted (s 14(b)), or both.
Licensed artist Blake Norman is Karli's brother and they do visit Blake at the parlour sometimes, as he is family, and bring the children occasionally to see their uncle if he has no appointments booked. The applicant has spoken to Blake, who will confirm that he still speaks to Matthew Austin about jobs he has done or is undertaking at the time and for any advice, as Matthew has much more experience than him and offers any advice he can, but in no way receives any financial gain from Blake or from the parlour for that.
Matthew had been at the parlour with Karli when Blake had asked him [Matthew] for advice. Matthew had said that he could understand why on some reviews [sic] it might appear that Matthew Austin was working at the parlour, but it was not the case. Also, at the last NCAT hearing, the applicant had admitted that he had asked friends to place fake reviews on the net and the artist had also asked friends and family to do so as well, in order to help the shop to attract more business. He had also stretched the truth in several posts by saying Josh was working, to attract his old clients to the shop, because he had moved out of the area years earlier, but would occasionally still stop into the parlour to catch up with them if in the area.
The parlour is open most days for long hours, and anyone, such as Fair Trading or the police, can walk in or check out what is happening. No-one had attended, however, except for the police on 12 February 2015, nearly 3 years ago. They also took details of an artist (Joshua Gilbert) who was not working at the shop anymore and was just visiting while back in the area, as he had moved away. Obviously he had no idea that this had taken place, as he did not see the police report until Fair Trading had wanted to use it as evidence against him. He had since had a conversation with Josh and asked him why he showed his licence. He said he didn't think at the time, as he was intimidated by the police.
Matthew also refers his old clients from when he was allowed to tattoo at the parlour. Also, until the refusal letter was received and Fair Trading had pointed out the fact, he had not realized that some of the shop's social media accounts still showed his telephone number. Originally, back in 2013, they had put his mobile number on it, as he was the manager until his licence was refused. The applicant has now had a landline for years, and has updated the social media account that he had failed to realize was inaccurate and to update the information, but it was now correct. He had since Googled his parlour and found old out of date numbers, one even showing a completely wrong address, which proved that he could not control everything online in relation to the Carnival of Carnage.
Further, after receiving the letter in 2015 that Matthew Austin's tattoo licence was refused, he sent a letter by mail, as his/printer scanner was out of action at the time. He received no information to indicate that nothing had been received, until the day he was warned that his operator licence was being revoked.
He had also admitted that he had Karli Norman working occasionally doing piercing, as he had explained in the last NCAT telephone conference he had admitted that he had misinterpreted the licensing legislation and now understands that no-one at all can work at the business without prior notification to New South Wales Fair Trading by means of a Close Associate Form, as anyone working at Carnival of Carnage is a contractor. He sees that now, but had misunderstood and thought it was only tattooists who needed to be declared. He had telephoned Karli immediately to tell her to cease any work or future work until the close associate form had been filled in. She also advised that she did not know that was the case, as she was not a tattooist. He now understands his mistake and has rectified it.
Counsel pointed out to him that Matthew Austin had described him as a business partner. The applicant replied that they put it that way because Mr Austin had the clients, but it was the applicant's business, and Matthew was a contractor. The fees were divided 50 - 50, and the applicant had supplied the inks and the facilities. It was not a real partnership, however. On the application he had described the business as a sole trader (exhibit R1, p 5) because it was true at the time, and the business was not a partnership.
He had also declared that the parlour had a business name, Carnival of Carnage Tattoo Studio (exhibit R1, p 22). Although he had been trading since late 2012 or early 2013, he had not registered the business name. When it was pointed out to him that registration of business names is compulsory unless the person is trading under his or her own name, he replied "Lock me up and throw away the key". Nor had he informed Fair Trading about the transferring of the business to a corporation, as he had "made a mistake".
He had received Fair Trading's letter of 12 May 2015 (exhibit R1, p 87) pointing out that as Matthew Austin's tattooist application had been refused, he must no longer employ him and must advise the Chief Executive in writing to remove his name as an employed tattooist. The witness said he had replied by letter, stating that he had told Mr Austin not to continue at the parlour, but Fair Trading had not received his letter. He had listed Amy Cooper as an apprentice artist and on 7 September 2017 had emailed the respondent advising that she had moved to another tattoo parlour and that her name should be removed from his application as soon as possible. By that time he had become aware of the requirement to notify close associate changes. Jason Campbell, who he had initially nominated, had left the business because he did not have a licence, but the applicant had not informed Fair Trading because at that time he did not know he had to. Despite the stipulation in Fair Trading's letter of 12 May 2015 that the applicant had an obligation to report all changes, he did not notify Austin's departure for two years. He had read the instructions to applicants at first but had not refreshed his memory.
In the application he had nominated John Norman as being the owner of the premises where the parlour was located (exhibit R1, p 22), but although Mr Norman no longer owned the premises, Mr McDonald had not informed the first respondent of the name of the new owner, Parvez & Sons (exhibit A1, document 18). He denied that he had displayed recklessness in that and other matters, saying he had only found out recently about the obligation to keep his list of associates up-to-date. Macquarie Property Partners were managing the property but they had refused to complete a close associates form for him. Parvez was the new owner, but he had been unable to recall its name at the time. When it was put to him that he only corrected his documents when their deficiencies were pointed out to him, he replied, "In this case, yes".
He agreed that important changes had been made to the business after the application had been lodged, especially as it ceased to operate as a sole trader and he had formed a corporation to run the business. A report by SAI Global showed the registration date of Carnival of Carnage Tattoo Studio Pty Ltd as 24 March 2015 (exhibit R3). Mr Donald said he had made the change as a result of a conversation about tax benefits and similar matters. The corporation began operating the business on 1 July 2015. Mr Austin had been taken into the corporation as well, but Mr McDonald did not know why he had been allocated two shares as against his own single share, as he had thought the business was conducted on a 50 - 50 basis. Mr Austin had not put up any money. Why would he give half the business away for nothing? He had been given a shareholding because he had the contacts in the business.
The witness agreed that if the business is operated by company, it must nominate a manager, and that still had not been done. He also had not understood that the corporation was regarded as an associate. He had not known that he should have been nominated as the manager and was unaware that he had done the wrong thing.
Mr Austin had resigned from the company in all respects, but was still listed while the appeals were pending, although he had not engaged in tattooing after the refusal decision had been notified. It was pointed out to him that although the refusal was dated 12 May 2015, he was still associated with the business until the determination of the second appeal in November 2015. The resignation was dated 24 November 2015. He agreed that he had not given the required notification until 24 November, having asked his accountant Judith Baker to lodge it, despite having received letters reminding him of his obligations. He said he had made mistakes, but now knew what he was required to do. When it was pointed out to him that no directors' meeting had been held in connection with Mr Austin's resignation he replied that he should have done a small business course, adding "Don't drag me through the mud".
The witness's attention was then drawn to a telephone message recorded by his accountant on 11 December 2015 (part exhibit R7) stating that he had asked that Matthew Austin be removed as a director and shareholder of the company. He said he would in fact have told her before then, as he attended at her office in connection with some other documents in November 2015. He said he did not know why he had made the call on 11 December, adding "What can I say?".
His further telephone message, dated 22 July 2017 asking his accountant to remove Matthew Austin as a director and shareholder was therefore incorrect. "It was another error - I didn't follow up".
He had not removed Matthew Austin as a director and shareholder when Austin's licence application was rejected on 12 May 2015 because he had thought that the refusal related only to tattooing and had decided to wait and see. He had told Mr Austin that he could no longer perform tattooing, but he was not involved in running the business. From May 2015, after the licence refusal, the tattooing was being done by Blake Norman, Amy Cooper and Andrew Bolton. Andrew had been working at the shop in 2015 and 2016. The applicant had not informed Fair Trading that he had started work, but had repeatedly asked Mr Bolton to complete a close associate consent form. When he failed to do so despite multiple requests, the applicant dismissed him, also in part because he found him smoking marijuana in the car park.
The applicant acknowledged that the applications for shares in the company (exhibit R6, pp 220-221) showed that two shares were allotted to Mr Austin and only one to Mr McDonald, although he had thought the arrangement was going to be half and half. "I mustn't have read it. I made many errors - it's no use asking".
His attention was then drawn to his, and for later years the company's, tax returns. He complained that he "[Couldn't] understand why I'm being asked about tax", but agreed that for the 2014 year the company had realized a profit of $2599.89, but in 2015 had suffered a loss of $53.57. For 2016 the loss was $2590.96, while the 2017 profit and loss statement showed a loss of $4247.11.
He said that the shop makes enough money to keep going. His main source of income, however, is his job in connection with a traffic signals contract with Roads and Maritime Services, which earns him about $71,000 a year [whether gross or net was not stated]. Counsel put it to him that only one trading year at the parlour had not resulted in a loss. He agreed, but said that he kept it going in the hope that it would turn around. He denied that he was operating the business on behalf of others.
In relation to the company's 2017 tax return (exhibit R6, pp 271-275) it was pointed out to him that as public officer he had declared that the continuity of majority ownership test had been passed (for the purpose of carrying forward losses), which was incorrect. He replied "What do you want me to say?" He said he had not been reckless in relation to his tax returns and could not accept responsibility for them.
He admitted that he had not notified Joshua Gilbert as an employee, but thought he had ceased working for the parlour before 2013. He had happened to be in the shop visiting when the police arrived and checked staff licences, whereupon he had shown the police his licence although he was not on the staff at the time.
The applicant acknowledged that he had falsely stated on Facebook that Joshua Gilbert was working at the studio and had asked him to post fake reviews for the purpose of attracting business. He added, "I didn't think a white lie would come and bite me." He said he did not know it was illegal because it was only in Facebook and had not hurt anyone.
Ms McDonald then turned to his traffic record (exhibit R2, pp58-60), which the applicant described as "minor traffic offences". Counsel pointed out that he had been convicted of negligent driving only three months after receiving his provisional license in 1999. In relation to the three charges in January 2000 for using an uninsured vehicle, using an unregistered vehicle and using false numberplates calculated to deceive, he said he had repaired a damaged vehicle and was desperate to get to work. He obtained plates from a cheap unregistered car belonging to a friend. Asked if he realized that was illegal, he replied "Yes, but I'm allowed 12 points".
A charge in the same month for failing to give way at a stop sign resulted in an accident, but the stop sign, he said, was obscured by trees and only the white stop line was visible. His licence was then suspended on 12 May 2000, and his unrestricted license was not issued until April 2004. Then followed a conviction for driving using a hand-held mobile telephone in December 2005, speeding in January 2006 and a further suspension on 11 January 2006.
A further speeding violation was recorded in April 2006 and driving on an expired license in September of that year. Following the reissue of his unrestricted license in February 2007, he was fined for speeding again in June 2007 and his licence was suspended in June 2007, although the suspension was not implemented, subject to a good behaviour condition. His unrestricted license was reissued in March 2008. Between that time and November 2014, the applicant was fined three more times for speeding, twice for disobeying traffic lights and once for driving unlicensed, a penalty he considered harsh because he just did not have his licence on him.
He was then asked if he expected others to inform him if he was at risk of a legal contravention, to which he replied that he did not, and complained that "You go straight to the negative".
It was put to him that although he says that he now understands the legal position, his traffic record shows a pattern of repetition. He replied, "There are others with worse records".
To suggest Steven McDonald is a danger to the public as a tattoo parlour operator was the most the most ridiculous thing he had heard. He is a genuine person who is trying his best and keeps the shop up-to-date as regards Council health guidelines, and not once has there ever been a complaint made against Steven or the parlour. To have his parlour and personal life ruined because of a couple of mistakes or misinterpretations of the legislation was completely unfair and unjust, in his eyes.
In relation to organized crime, he understands that the tattoo industry has a bad history, but he is hoping that shops like Steve's that are not affiliated or have anything to do with organized crime can change people's views. Steven McDonald knows there is a risk that someone could try and stand over him or intimidate him, the shop and anyone who works there, but has always remained firm that if that were ever to happen, he would be reporting it to the police, so they could stop them from doing so.
The third reference (undated) is from Julie Cross, who says that she writes to uphold the applicant's reputation as a law-abiding citizen. She notes that he also works full-time to have a weekly income, as the tattoo shop does not generate enough income to support him and his family. She is the applicant's elder sister and can acknowledge that he is in no way involved in any criminal activity whatever. His income from the tattoo parlour and his full-time job is to help support himself and his mother and stepfather, with whom he lives. He helps to pay rent, electricity, water and day-to-day living expenses, as well as for his own personal needs such as car registration and health insurance. Without his income he would fall on financial hardship and be unable to help his family.
He is a very respected man and is often called upon for help by family and friends. He was involved with Western City Tigers Rugby League Association. He coached his nephews' football team and was a valued member for 12 years. She believes that he will now at all times keep up-to-date with rules and regulations and any changes made to the tattoo legislation.
The respondents also relied on the s 58 documents (exhibit R1) and other documentary material. They also adduced some confidential evidence in a closed hearing held pursuant to s 49 of the Civil and Administrative Tribunal Act 2013 (CAT Act).
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Pursuant to s 27(1)(a), a person may apply to this tribunal for review of a refusal or failure by the Director-General to grant a licence. The Act does not expressly confer jurisdiction on the tribunal to review any report or determination made by the Commissioner of Police but does so implicitly, as s 27(3)(c) provides that "the Tribunal is not prevented from determining whether the Director-General made the correct and preferable decision regarding the application or the licence concerned merely because of the determination of the Commissioner": Smith v Commissioner of Police and Commissioner of Fair Trading [2014] NSWCATAD 184, [22]. Nevertheless, the tribunal is required to take the adverse security determination into account as an essential legally relevant consideration to which weight must be given: id., [24].
The assessment of whether an applicant is a fit and proper person rests with the Commissioner of Police, but the Act makes it clear that it is the Director-General's decision that is under review, not the Commissioner's determination. Under s 8(2) of the ADR Act, the person or body whose decisions are administratively reviewable is taken to be the only administrator in relation to the making of an administratively reviewable decision, even if some other person or body also had a role in the making of the decision.
As with all legislation, the provisions of the TP Act and the powers that it confers must be construed and applied in such a way as to be consistent with the language and purpose of all the provisions of the Act: Project Blue Sky Inc. v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355, [69]. The Act contains no objects clause, but the tribunal may have regard to the Minister's second reading speech to ascertain the purpose of the legislation, the mischief that it was designed to cure. The second reading speech on the TP Act noted that the Act was introduced in response to gang crime in New South Wales. It aimed to break the stranglehold that OMCGs had over the tattoo industry. It was expected that removing bikers from the tattoo industry would reduce the reasons for rival gangs to engage in turf wars, because those businesses would no longer be symbols of a gang's territory. The Act's purpose is not, however, limited to eradicating the influence of OMCGs in the industry. The "fit and proper" criterion applied in the Act is of much broader application, as Montgomery SM explained in his comprehensive review of the authorities in Smith, at [38] to [41].
There is no major difference between the parties' positions as to the meaning of "fit and proper" and "public interest" in the TP Act context (although a number of times the applicant interpreted the latter phrase as equivalent to "danger to the public" and had to be reminded of the actual language). The High Court has explained that assessing whether a person is fit and proper to hold a licence is a value judgment, involving concepts that should not be "narrowly construed or confined" and may extend to "any aspect of fitness and propriety that is relevant to the public interest: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 348. In Hughes and Vale Pty Ltd v New South Wales (No. 2) (1955) 93 CLR 127, the Court said:
The expression "fit and proper person" is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. 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 on its own circumstances (at 156 - 157).
In Bond, Toohey and Gaudron JJ said at 380 -
The expression "fit and proper person", standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of "fit and proper" cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides indication of likely future conduct) or reputation (because it provides indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.
In a much-quoted passage in Sobey v Commercial and Private Agents Board (1979) 22 SASR 70, Walters J had this to say:
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 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.
In the context of the TP Act, unfitness can be indicated by criminal convictions, criminal associations, habitual recidivism, formal or informal links with OMCGs, failure to implement proper tattooing practices and general disregard for the law. Relevant in this case are Hennessy DP's comments in Saadieh v Director-General, Department of Transport [1999] NSWADT 68, [17]. In the context of a taxi licence, the Tribunal identified factors relevant to fitness and propriety as including:
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.
As regards the applicant's reputation, McHugh J has pointed out that 'character' refers to the inherent moral qualities of a person and is to be contrasted with reputation, which refers to the public estimation or repute of a person, irrespective of the inherent moral qualities of that person (Melbourne v R (1999) 198 CLR 1, 15).
As regards the public interest issue, that phrase is designed to give the broader interests of the community priority over private interests: Smith, [42]. It is an inherently broad concept giving the decision-maker the ability to have regard to a wide range of factors in choosing whether to exercise a discretion adversely to an individual: Commissioner of Police, New South Wales Police v Toleafoa [1999] NSWADTAP 9, [25]. Further, an applicant's personal interest in retaining his licence cannot outweigh the public interest in having full confidence in the professionalism of people involved in the industry in question: Blissett v Commissioner of Police, New South Wales Police [2006] NSWADT 114, [32].
The respondents had submitted that there was reason to believe Matthew Austin still held an undeclared financial or other interest in the business, arguing that the fact that he transferred his two shares back to the company without apparent consideration suggested some such arrangement. The evidence of the applicant and Ms Baker, however, was that Mr Austin had been granted the two shares gratis in the first place, as an incentive to stay with the business and work hard, and in recognition of his important contribution. In the absence of other evidence to the contrary, that explanation may be accepted
Nevertheless, that still leaves a collection of matters that have been admitted or insufficiently explained, including the following:
1. Although Carnival of Carnage had been trading under that name since late 2012, the applicant did not register the business name until late 2013, following a letter from Fair Trading dated 28 October 2013 seeking further information. Carrying on business under an unregistered name (other than the trader's own name) is an offence under s 18 of the Business Names Registration Act 2011 (Cth). In cross-examination Mr McDonald admitted that failure, remarking "Lock me up and throw away the key".
2. Although he had declared Matthew Austin as a tattooist, he did not lodge a close associate notification when Mr Austin became a director and shareholder in the company that took over the business. He stated that Mr Austin had not been a director or shareholder at the date of the application and he did not realize that changes occurring after the date of the application had to be notified. Yet s 11(6) of the PT Act specifically requires notification of any change in details occurring while a decision on an application is pending, and the 24-page application form is emphatic about the need to declare close associate relations (although it does not appear to paraphrase s 11(6) explicitly).
3. Nor did he notify Mr Austin's resignation as a director until after the dismissal of his second appeal against the refusal of his licence in November 2015, although the refusal decision had not been stayed. At that time he asked his accountant to remove Mr Austin as director and shareholder, but she failed to do so and he concedes that he neglected to follow up the matter.
4. After the company had taken over the business, he was required by s 11(3) to appoint a manager but failed to do so. He said he did not know he had to do so.
5. He allowed Karli Ryan-Norman to work as a body piercer at the studio without declaring her as a close associate. He averred that he had been under the impression that the requirement applied only to tattooists, but the application form makes it quite clear that all employees and contractors are covered.
6. He allowed Andrew Bolton to work at the studio without declaring him as a close associate. The evidence shows that Mr Bolton was uncooperative, declining to execute a close associate consent form, and was later dismissed for that reason and for smoking marijuana, but the applicant nevertheless allowed him to work for several months.
7. He failed to notify Fair Trading that Jason Campbell, who he had initially nominated but had left the business at the outset, was no longer working at the parlour until 20 August 2017.
8. The initial application had correctly named John Norman as the owner of the business's premises, but he failed to report the transfer of the property to Parvez & Sons, from whom he acquired a lease from 8 January 2015 to 7 January 2018. He explained that Macquarie Property Partners had declined to sign a close associate form and he had forgotten the new owner's name.
Then there is the matter of the applicant's traffic history. Since first being issued with a provisional licence in 1999, he has incurred a total of 19 infringements of New South Wales road rules. Six were for speeding, the most recent being in November 2014, and two were for disobeying traffic lights. In 2000 he was fined $400 for using an unregistered vehicle on a road, a further $400 for using an uninsured motor vehicle and $600 for driving a vehicle while displaying an unauthorized number plate calculated to deceive (exhibit R2, pp 57 - 60). His first violation, for negligent driving, was recorded only three months after he received his provisional licence in August 1999.
He has received three licence suspensions, the first in 2000, the second in 2006 and the third in 2007. The 2007 suspension was not implemented, subject to good behaviour conditions. Nevertheless, 11 months later he was fined for another contravention and went on to commit a further five violations between 2009 and 2014.
In his statutory declaration the applicant described his traffic record as "some minor traffic offences which I believe most drivers would have after 17 years of driving". In cross-examination he admitted that using number plates calculated to deceive was illegal, but explained that "I'm allowed 12 points". When some other contraventions were referred to, he complained that "You go straight to the negative". He said that the infringements for disobeying red lights were his word against that of the police. When it was put to him that his traffic record showed a pattern of repeat offending, he countered, "There are others with worse records".
The applicant's traffic record, and his nonchalant or combative defence of it, does indeed point to a pattern of repetition that inspires little confidence in his readiness to comply in the future with regulatory legislation, including the TP Act. His most recent violation was only three years ago. He asserts that his record consists of minor offences that most drivers would have after 17 years, but most drivers do not have their licences suspended, let alone three times, with the third suspension stayed on good behaviour conditions that he soon proceeded to breach. Saying that there are others with worse records does not assist his case.
The fake reviews and false statements on social media are significant concerns. In his statutory declaration the applicant wrote that at the stay hearing "I admitted I had asked friends to put fake reviews up and the artists have also asked friends and family to do so as well to help the shop get more business. I also have stretched the truth in several posts by saying Josh was working to attract his old clients to my shop because he had moved out of the area years earlier but he would over the years occasionally still stop into the Parlour to catch up with us if in the area".
In cross-examination Mr McDonald said he had not thought that a "white lie" of that nature would return to bite him. He admitted he had lied in order to attract business but said he had not known it was illegal. It was only in Facebook and had not hurt anyone.
Such misleading or deceptive conduct in trade and commerce is likely to infringe s 18 of the Australian Consumer Law (schedule 2 to the Competition and Consumer Act 2010 (Cth)). Consisting of false statements about the characteristics of services, it may also violate s 34 of that law, which carries a pecuniary penalty. It also reflects poorly on the applicant's integrity.
The applicant's referees are aware of the general nature of the current proceedings and acknowledge that he had made many mistakes as a result of misunderstanding the legislation. Mr Portelli opined that falling into error in that way was part of the process of learning to run a small business. All the referees regarded him as a law-abiding citizen and expressed confidence that he would be able to comply with legislative requirements in the future. I accept those references as showing that he has a good reputation in the community, as contemplated in Saadieh, and has been involved in beneficial activities such as coaching junior football teams.
The referees also suggested that licence refusal would impose financial hardship on him and compromise his ability to provide for his parents. Lal v Director-General, Department of Transport [2001] NSWADT 74, [47], as well as Blisset and other cases have held, however, that hardship to an applicant is not a factor that can be taken into consideration on review. In any event it is not altogether obvious how financial hardship could result from licence refusal in this case. The applicant admitted in cross-examination that the parlour had operated at a loss in all but one year of its existence and did not attempt to explain why closing it down would deal him a crippling financial blow.
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To the applicant's credit, he has no record of non-traffic offences and there is no evidence to suggest that he has ever been a member of an OMCG, or had any direct association with one. He did, however, employ Mr Austin as a tattooist (describing him at one point as his "business partner") and installed him as a director and shareholder of the company, though knowing him to be linked with an OMCG and that he had had worked for an OMCG member at the Naked Gun.
In the context of the TP Act, it has been held that 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": see Allen v Commissioner for Fair Trading [2015] NSWCATAD 273, [49]; Mielczarek v Commissioner of Fair Trading [2017] NSWCATAD 5, [27].
The applicant has some links with the OMCG world, but the evidence suggests that they are not direct or close. He has no non-traffic record of offences, nor has he been the subject of any complaints about failure to implement proper tattooing practices or of improper treatment of clients. On the other hand, he has accumulated numerous breaches of the TP Act, a probable offence under the Business Names Act and contraventions of the Australian Consumer Law involving dishonesty. He has a poor traffic record which also includes one offence of dishonesty. One could therefore conclude that he shows a general disregard for the law. He admits that he made many "mistakes" in relation to the TP Act, which he said were based on misunderstandings, but they involved at least negligence through his failure to inform himself properly of his legal obligations.
Further, when asked about his various breaches at the hearing, he attempted to diminish their significance. "Nobody's perfect", he said, but stressed that he now understood the law's requirements. "Don't drag my name through the mud", he replied in answer to a question about one of his violations. "What can I say?.... What do you want me to say?.... You go straight to the negative", he said, as if it was the cross-examiner who was at fault. To another question, he replied, "I made many errors, so it's no use asking" or again, "Why am I being asked about tax?" .In relation to his failure to notify the change in premises ownership, it was put to him that he only corrected his documents when their deficiencies were pointed out to him, to which he replied, "In this case, yes". On the use of false number plates calculated to deceive, his only comment was that he was allowed 12 points. Of his traffic history generally, he commented that there were others with worse records. Asked about his misleading and deceptive posts on social media, he claimed that they had not hurt anybody. He could also be flippant, replying to a question about another contravention, "Lock me up and throw away the key".
The law does not require an applicant to profess admiration for the administration of the TP Act, but the applicant's responses suggest a reluctance to accept full responsibility for his past actions and a lack of seriousness about his statutory obligations. The likelihood of any future repetition of past contraventions is one of the major considerations set out in Saadieh in relation to fitness and propriety. The applicant assures the tribunal that he now understands his obligations and will comply with them, but his traffic history shows a sustained pattern of repeated offences, despite licence suspensions. As counsel observed, he also displays a propensity to wait for others to point out what he has done wrong before taking corrective action. He volunteered the comment that his many contraventions showed that he should have undertaken a small business course, but he has not undertaken such a course or commenced one.
Mr McDonald pointed out that the successful applicant in McCurday had been an OMCG member for 24 years, serving for part of that time as commander of the Central Coast branch. The tribunal noted that OMCG membership itself virtually constitutes a prima facie case of lack of fitness and propriety, but observed that McCurday had left the gang because of disillusionment over its direction, including infiltration by criminal elements and drugs. He had run the Central Coast branch as a separate and more family-oriented entity, but left after finding he could no longer oppose Sydney on the drug issue. He had no substantial criminal record, and so much as he did have was about 30 years old. He had no continuing association with the OMCG and was not under its influence. If he were to develop new links with it, the police would soon become aware of it.
The applicant also cited Deakin, where the successful applicant had a long criminal history, a background of mental disorders and an antagonistic attitude to law enforcement. He had acknowledged his past misdeeds, however, and appeared to have reformed. The tribunal thought the negative attitudes to the police he expressed on social media were more of a marketing exercise not showing any disregard for the law or any propensity to reoffend. The applicant had tried to work within the law to achieve his business objectives. "The overriding factor", the tribunal continued, "is his conduct over recent years, which indicates that he has made significant progress in changing his behaviour". The medical reports confirmed the applicant's own evidence regarding the extraordinary stress he had experienced in recent times. "Notwithstanding those stressful circumstances the applicant has not reverted to the type of conduct that is seen in his criminal history". In both McCurday and Deakin, the decisive factor was the evidence making it unlikely that the applicants would reoffend or associate with criminal elements. As was pointed out above, the evidence in the present case, though it relates to conduct of a different order of seriousness, does not justify confidently predicting that the applicant will in the future comply with relevant legislation in a conscientious and timely manner. I find that the applicant is not a fit and proper person to hold a tattoo operator licence.