PSG Security Group Pty Ltd v Commissioner of Police, NSW Police Force; ERA Security Group Pty Ltd v Commissioner of Police, NSW Police Force - [2022] NSWCATOD 164 - NSWCATOD 2022 case summary — Zoe

NSWNSWCATOD

PSG Security Group Pty Ltd v Commissioner of Police, NSW Police Force; ERA Security Group Pty Ltd v Commissioner of Police, NSW Police Force

[2022] NSWCATOD 164

NCAT Occupational|2022-09-12

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At a glance

Source facts

Court

NCAT Occupational

Decision date

2022-09-12

Catchwords

(2018) 98 NSWLR 730 Bass v Permanent Trustee Co Ltd [1999] HCA 9
(1959) 101 CLR 298 Kocic v Commissioner of Police, NSW Police Force [2014] NSWCA 368
[2020] FCAFC 87
(2020) 276 FCR 1 O'Neill v Commissioner of Police, NSW Police Force [2005] NSWADT 130 Seltsam Pty Ltd v McGuiness [2000] NSWCA 29

Source

Original judgment source is linked above.

Catchwords

(2018) 98 NSWLR 730 Bass v Permanent Trustee Co Ltd [1999] HCA 9(1959) 101 CLR 298 Kocic v Commissioner of Police, NSW Police Force [2014] NSWCA 368[2020] FCAFC 87(2020) 276 FCR 1 O'Neill v Commissioner of Police, NSW Police Force [2005] NSWADT 130 Seltsam Pty Ltd v McGuiness [2000] NSWCA 29(2000) 49 NSWLR 262 Shi v Migration Agents Registration Authority [2008] HCA 31(2008) 235 CLR 286 Sydney Local Health Network v QY and QZ [2011] NSWCA 412(2011) 83 NSWLR 32 Thiess v Collector of Customs [2014] HCA 12(2014) 250 CLR 664 ZTAL v Minister for Immigration and Border Protection [2017] HCA 34

Judgment (22 paragraphs)

[1]

250 CLR 664 ZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 Category: Principal judgment Parties: Proceedings 2022/00194998 PSG Security Group Pty Ltd (Applicant) Commissioner of Police, NSW Police Force (Respondent)

[4]

REASONS FOR DECISION

On 4 July 2022 PSG Security Group Pty Ltd (PSG) and ERA Security Group Pty Ltd (ERA), together the applicants applied to the NSW Civil and Administrative Tribunal (the Tribunal) for administrative review under the Administrative Decisions Review Act 1997 (NSW) (ADR Act) of the decisions made under s 26(1A) of the Security Industry Act 1997 (NSW) (the SI Act) by a delegate of the Commissioner of Police (the respondent) to revoke their master security licence numbers 000103240 and 000105291 (the licences) on 28 June 2022, with effect from 8 July 2022.
Also, on 4 July 2022 the applicants applied to the Tribunal for an order that the respondent's decision to revoke PSG's master licence be stayed. On 7 July 2022, the Tribunal made an order refusing the application for a stay and gave reasons for the decision on 8 July 2022.
The applicants did not seek an internal review of the decisions on the basis that the application to the Tribunal was urgent. On 5 October 2002, the Tribunal directed the parties to provide submissions regarding its jurisdiction to determine the matter. On 11 October 2022 the applicants provided submissions that the Tribunal is empowered to determine the matter pursuant to s 55(4) of the ADR Act. For the purposes of s 55(5)(c) of the ADR Act, the applicants submitted that at the stay application they submitted they did not intend to proceed with an internal review and as such there was no 'outcome' to any internal review.
In making its decision, the Tribunal is satisfied it can deal with the applications for administrative review. Even though the applicants have not applied for an internal review, which they were entitled to, it is necessary for the Tribunal to deal with the application in order to protect the applicants' interests.
The Tribunal also takes into account the objects of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act). Section 3(d) of the Act seeks to ensure that the Tribunal is enabled to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible.
On 9 September 2022, the applicants made an application to refer two questions of law to the Supreme Court. The application was refused on 12 September 2022.
For the reasons that follow the Tribunal is satisfied that the correct and preferable decision is to affirm the decisions made by the Commissioner of Police to revoke PSG and ERA's master security licences.

[5]

Evidence

The documentary evidence filed by the respondent included the documents produced pursuant to s 58 of the ADR Act (which became Exhibits R2 and R3) and an affidavit of Mr Grey (Exhibit R1). Mr Grey was not required for cross examination and no evidence was led by the applicants.
The evidence discloses the following facts, ERA and PSG made applications for security licences on 22 May 2017 and 24 December 2019 respectively. In doing so they both completed an application form. Both ERA and PSG listed Mr Ricky Oshry as a close associate. Both applicants represented to the respondent in the application forms that within the last three years, Mr Oshry was not concerned in the management of a corporation that was the subject of a winding up order or had an administrator appointed.
However on 29 September 2015 a liquidator was appointed to Epic Entertainment Australia Pty Ltd (Epic), Mr Oshry was a director of Epic from 25 October 2013 to 12 May 2020. On 5 October 2015, a winding up order was made for the company.
Mr Oshry was also a director of Subzero Entertainment Pty Ltd from 10 December 2010 to 12 January 2020. On 1 May 2019, a liquidator was appointed to Subzero. On 3 May 2019, a winding up order was made for the company.
On 28 June 2022, the respondent decided to revoke PSG's and ERA's security licences pursuant to section 26(1)(a) of the SI Act. The applicants have the same registered office, director and secretary, who is Mr Gulati. The decisions to revoke the licences as well as the reasons for the decisions are set out letters from the respondent to PSG and ERA dated 28 June 2022. The decisions are in all material respects in identical terms. The reasons explain that the licences are revoked because Mr Oshry was a close associate of PSG and was involved with the management of Epic and a company called Subzero, being companies placed into administration in the last three years.
The decisions contain a covering letter which attaches a two page statement headed 'Notification of revocation of licence'. The decisions explain that the licences are revoked pursuant to s 26 of the SI Act.
The decisions to revoke were preceded by a letter dated 12 April 2022 from the respondent to Mr Gulati as PSG's nominated person, inviting him to show cause as to why PSG's master security licence should not be revoked pursuant to s 26(1A) of the SI Act. The letter stated that Mr Oshry, being a close associate of PSG, had been involved in the management of Epic and a company called Subzero, being companies placed into administration in the last three years. Mr Gulati responded to the letter on 22 June 2022.
On 1 August 2022, by consent, the Tribunal reinstated PGS and ERA's licences on the condition that, inter alia, Mr Oshry is not to act in a position of management.
On 4 August 2022, the respondent's solicitors wrote to the applicant's solicitors raising a different head of power, namely s 15(2C) of the SI Act for the decision to revoke the licences.
On 6 August 2022, orders were made for the parties to file evidence and submissions pursuant to a timetable. These orders were amended on 31 August 2022 to give the parties additional time to file evidence and submissions.

[6]

Administrative Decisions Review Act

Section 6(1) defines 'decision' as including any of the following: (a) making, suspending, revoking or refusing to make an order or determination, (b) giving, suspending, revoking or refusing to give a certificate, direction, approval, consent or permission, (c) issuing, suspending, revoking or refusing to issue a licence, authority or other instrument, (d) imposing a condition or restriction, (e) making a declaration, demand or requirement, (f) retaining, or refusing to deliver up, an article, (g) doing or refusing to do any other act or thing. (2) Decision made under enabling legislation For the purposes of this Act, a decision is made under enabling legislation if it is made in the exercise (or purported exercise) of a function conferred or imposed by or under the enabling legislation.
Section 7 defines the meaning of an 'administratively reviewable decision': (1) An administratively reviewable decision is a decision of an administrator over which the Tribunal has administrative review jurisdiction.
Section 9 explains when administrative review jurisdiction is conferred on the Tribunal: (1) The Tribunal has administrative review jurisdiction over a decision (or class of decisions) of an administrator if enabling legislation provides that applications may be made to the Tribunal for an administrative review under this Act of any such decision (or class of decisions) made by the administrator: (a) in the exercise of functions conferred or imposed by or under the legislation, or …
Section 55 of the ADR Act makes it plain that the Tribunal only has jurisdiction to review 'an administratively reviewable decision'.
Pursuant to s 63 of the ADR Act, the Tribunal is required, in determining an application for an administrative review, to decide what is the correct and preferable decision having regard to the material before it. (1) In determining an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal is to decide what the correct and preferable decision is having regard to the material then before it, including the following: (a) any relevant factual material, (b) any applicable written or unwritten law. (2) For this purpose, the Tribunal may exercise all of the functions that are conferred or imposed by any relevant legislation on the administrator who made the decision. (3) In determining an application for the administrative review of an administratively reviewable decision, the Tribunal may decide: (a) to affirm the administratively reviewable decision, or (b) to vary the administratively reviewable decision, or (c) to set aside the administratively reviewable decision and make a decision in substitution for the administratively reviewable decision it set aside, or (d) to set aside the administratively reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal.
Section 38 of the CAT Act permits the Tribunal to determine its own procedure. The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit. Critically, the Tribunal must act with procedural fairness.

[7]

Security Industry Act

The respondent revoked the applicants' master security licences pursuant to s 26 of the SI Act. Section 26 sets out both mandatory and discretionary circumstances in which a licence may be revoked.
Section 26 of the SI Act, relevantly provides: A licence may be revoked - … (b) if the licensee - (i) supplied information that was (to the licensee's knowledge) false or misleading in a material particular in, or in connection with, the application for the licence or the renewal of the licence, or (ii) contravenes any provision of this Act or the regulations, whether or not the licensee has been convicted of an offence for the contravention, or (iii) contravenes any condition of the licence, or … (d) for any other reason prescribed by the regulations. (1A) The Commissioner must revoke a licence where the Commissioner is satisfied that, if the licensee were applying for a new licence, the application would be required by this Act to be refused.
Section 26(1A) relevantly refers to circumstances in which an application for a security licence must be refused. Sections 15(2C), 15(4) and 15(5) of the SI Act refer to circumstances in which an application for a new licence would be refused: (2C) The Commissioner must also refuse to grant an application for a licence if the applicant has supplied information that is (to the applicant's knowledge) false or misleading in a material particular in, or in connection with, the application. … (4) The regulations may provide additional mandatory or discretionary grounds for refusing the granting of an application for a licence. (5) Except as provided by the regulations, a reference in this section to an applicant includes, in the case of an application for a master licence, a reference to each close associate of the applicant.
Section 5 of the SI Act provides a definition of 'close associate': (1) For the purposes of this Act, a person is a "close associate" of an applicant for, or the holder of, a licence 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 his or her own right or on behalf of any other person), in the business of the licence applicant or holder, 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 conduct of that business, or (b) holds or will hold any relevant position, whether in his or her own right or on behalf of any other person, in the business of the licence applicant or holder. (2) In this section--

[11]

Security Industry Regulation

Clause 12(4)(c)(ii) of the Security Industry Regulation 2016 (NSW) (SI Regulation) requires corporations to provide information about the nominated person for the licence who is an individual and who is a close associate of the applicant.
As set out above, section 15(4) of the SI Act permits the SI Regulation to provide additional mandatory or discretionary grounds for refusing the application for a licence. Clause 13 of the SI Regulation sets out mandatory and discretional grounds for refusing to grant the licence. Regulations 13 is titled 'Grounds for refusal to Grant licence: section 15(4)': (1) Mandatory grounds for refusal - individual For the purposes of section 15 (4) of the Act, the Commissioner must refuse to grant an application for a master licence if the applicant, or a close associate of the applicant - (a) at any time in the 3 years immediately preceding the application for the licence was an undischarged bankrupt or applied to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounded with his or her creditors or made an assignment of his or her remuneration for their benefit, unless the Commissioner is satisfied that the person took all reasonable steps to avoid the bankruptcy, or (b) at any time in the 3 years immediately preceding the application for the licence was concerned in the management of a corporation when the corporation was the subject of a winding up order or when a controller or administrator was appointed, unless - (i) the winding up of the corporation was by way of a member's voluntary winding up, or (ii) the Commissioner is satisfied that the person took all reasonable steps to avoid the liquidation or administration. (2) In determining the reasonable steps that could be taken by a person to avoid bankruptcy, liquidation or administration, the Commissioner is to have regard to the steps that could have been taken by the person at the time that the financial difficulties leading to the bankruptcy, liquidation or administration arose. (3) Mandatory grounds for refusal - corporation For the purposes of section 15 (4) of the Act, the Commissioner must refuse to grant an application for a master licence if the applicant - (a) is a corporation that is the subject of a winding up order or for which a controller or administrator has been appointed, or (b) at any time in the 3 years immediately preceding the application for the licence, was a corporation the subject of a winding up order or for which a controller or administrator was appointed. (4) Discretionary grounds for refusal For the purposes of section 15 (4) of the Act, the Commissioner may refuse to grant an application for a licence if the applicant, or a close associate of the applicant, has within the period of 3 years before the application for the licence was made, contravened any provision of the Act or the regulations under the Act, whether or not the applicant or close associate of the applicant has been convicted of an offence in relation to the contravention. (5) Discretionary grounds for refusal - master licence For the purposes of section 15 (4) of the Act, the Commissioner may refuse to grant an application for a master licence if the applicant, or a close associate of the applicant, has, within the period of 3 years before the application for the licence was made, been found guilty of an offence under Chapter 4 of the Australian Consumer Law that relates to a contravention of section 29, 31, 33, 34, 36 or 50 of that Law.

[12]

The Commissioner's decisions to revoke the licenses

As referred to above, on 12 April 2022 the respondent sent Mr Gulati of PSG a 'show cause notice in relation to its master security licence'. Mr Gulati was informed that the respondent was considering revoking the licence on the basis that Mr Oshry was a close associate of PSG and; 1. a director of Subzero that had an external administrator appointed on 1 May 2019 and was wound up on 6 November 2019 owing significant debts. The company was struck off on the register and deregistered on 12 January 2020. 2. a director of Epic that had an external administrator appointed and wound up on 29 September 2015 and was deregistered on 20 February 2020 owing significant debts.
The notice referred to s 26(1A) of the SI Act, clause 13 of the SI Regulation and s 21 of the Interpretation Act 1987 (NSW). The letter also specifically referred to question 3 of the application form which deals with the history of the nominated person and pointed out that PSG failed to notify the respondent on 24 December 2019 (the time of making an application) that Mr Oshry had been concerned in the management of a corporation that was the subject of a winding up order or had an administrator appointed within the last three years.
The notice dated 21 April 2022 invited PSG to provide written reasons why the licence should not be revoked. Specifically, PSG was asked to provide a submission supported by: A statement from the appointed administrator involved in the matters of Subzero… and Epic…. and should indicate the reasons directly attributed to the administrator being appointed and whether Mr … Oshry was a contributing factor. The submission should also include details of the two corporations' creditors as well as any debts and the circumstances which contributed to those debts.
PSG's solicitors, McGirr and Associates responded to the notice on 22 June 2022. They did not include a statement from the appointed administrator of Subzero and Epic or corporations' creditors and made no submissions about the circumstances which contributed to those debts.
The letter from McGirr and Associates submitted that the respondent's notice was 'infected by jurisdictional error' as section 15(4) of the SI Act read with cl 13(2) of the SI Regulation is a scheme for an individual and that only 13(3) of the SI Regulation applies to a corporation. The letter also refers to Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; 204 CLR 82 for the proposition that the respondent is 'entitled to be made aware of both the content of the allegation and the precise head of power' the respondent relies on.
On 28 June 2022, the respondent revoked PSG's and ERA's master security licences. The notifications note that there was no response to the issues it raised in its notice and concludes that Mr Oshry is not suitable to be the close associate of corporation holding a master security licence.

[13]

Applicants' submissions

The applicants submit that the respondent 'appears to' have relied on cl 13(1)(b) of the Regulation in revoking the licences, however she has no power under cl 13(1)(b) to do so and that any later reliance on section 15(2C) of the SI Act cannot be relied on as it was not part of the decision.
The applicants challenge the legality of the decisions made by the respondent. First, whether on its proper construction, cl 13(1) of the Regulation empowered the respondent to mandatorily revoke the licences of corporations. It was submitted that s 21 of the Interpretation Act 1987 (NSW) (Interpretation Act) is not applicable to cl 13 of the SI Regulations because of s 5(2) of the Interpretation Act.
Secondly, in determining an application for review under s 63 of the ADR Act, whether the respondent can rely upon a different statutory power, namely s 15(2C) of the SI Act before the Tribunal as it was not utilised to make the original adverse decisions against the applicants. The applicants submitted that both the respondent and the Tribunal has no 'power or jurisdiction' to change the basis for the decision. That it is not 'permissible', 'lawful' or 'proper' to rely on a ground that was not considered by the respondent in its reason for the decision.
This is so because the role of the Tribunal is to remake the decision, not to create a new decision, not created by the decision maker and that this conduct of changing the basis for the decision undermines the Tribunal and leads to unfairness. The Tribunal only has power to make a decision on the same grounds and evidence as before the decision maker and the Tribunal should not permit the respondent to rely on s 15(2C) of the SI Act.
The applicants rely on Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v CPJ16 [2019] FCA 2033 (CPJ16) at [40]-[41] for the proposition that the Tribunal is only empowered to consider the decision made by the respondent which they characterise as the decision to revoke the licence pursuant to clause 13(1)(b) of the Regulation.
In CPJ16, the delegate determined that CPJ16 failed the character test under s 501(6)(d)(i) of the Migration Act 1958 (Cth) as there was a risk of her engaging 'in criminal conduct in Australia'. Before the Tribunal, the Minister raised another ground under s 501(6)(c) of the Migration Act 1958, that regard be had to CPJ16's past and present criminal conduct and general conduct.
At [42], the Court noted that 'different factual questions' arose under s 501(6)(c) from those in s 501(6)(d)(i) in determining whether the applicant passed the character test and refused to consider another ground under s 501(6)(c) of the Migration Act 1958.
On appeal in Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v CPJ16 [2020] FCAFC 87; 276 FCR 1 circumstances had changed. The Court considered the substantive issues in the appeal to be in the nature of an advisory opinion and decided not to proceed. The appeal was dismissed. In its reasons, the Court said at [28]: As such, even though we did not regard the decision of the primary judge to be self-evidently correct, we considered on balance that it would not be appropriate to determine the correctness of that decision on these appeals.
The applicants also relied on Aerolink Air Services Pty Ltd v Civil Aviation Safety Authority [2003] AATA 1357 for the proposition that the respondent should not be permitted to raise new allegations as it is inconsistent with the respondent's obligation to act as a model litigant. In Aerolink, SM Allen refused to accept further evidence that was not before the decision maker, in regard to a different ground. The circumstances where that Aerolink was not in a position to deal with the new evidence [4]-[5].

[14]

Respondent's submissions

The respondent submits that the decisions to revoke the licences were made on mandatory bases. The respondent relies on two grounds.
First, on the basis of combined operation of ss 26(1A) and 15(4) of the SI Act and cl 13(1) of the SI Regulation. Clause 13(1) of the SI Regulation applies where a close associate such as a shareholder or a director has been an undischarged bankrupt or has been concerned in the management of another company which has been the subject of a winding up order or placed into administration. The respondent submits that this interpretation is consistent with obiter dicta in Banerjee v Commissioner of Police [2018] NSWCA 283; (2018) 98 NSWLR 730 at [16] and in Coulthart v Commissioner of Police, NSW Police Force [2016] NSWCATAD 297 at [4]-[6] and [34]. In Coulthart, the Tribunal found that the Commissioner was correct in refusing a corporate licence because Mr Coulthart was involved in the management of another company and was a close associate of the corporation applying for the licence within the three year period.
The respondent places reliance on the evidence that Mr Oshry, a close associate of both ERA and PSG has been involved in the management of companies that have been the subject of a winding up order/controller appointed within the preceding three years of the respective licence applications being lodged.
The respondent relies on Sydney Local Health Network v QY and QZ [2011] NSWCA 412; 83 NSWLR 321 at [10] and [40] for the proposition that the Tribunal would avoid, if possible, to construct an instrument using the same term to have a different meaning. The respondent contends that the term 'applicant' in cl 13(3) has the same meaning as the term 'applicant' in cl 13(1).
The applicant refers on a 'textual indication' in the SI Act that the term 'applicant' is a person applying for a licence, both a natural person and a corporation can be an 'applicant', as such a reference to a person means a natural person and a corporation. Section 5 of the SI Act is a definition of a 'close associate' of an applicant. It would be an odd gap if there was no provisions for 'close associate' or a corporation.
Further, if the term 'applicant' in cl 13(1) excludes a corporation, it would lead to an anomalous result. That is, there would be no basis to refuse an application where a director or shareholder was the subject of a winding up order or administration however, where there was a natural person involved, for example a business owner engaged in similar conduct such as bankruptcy would be a basis to refuse an application would exist.
Secondly, on the basis of combined operation of ss 26(1A) and 15(2C) of the SI Act. The respondent relies on the evidence that Mr Oshry supplied information that was false or misleading in a 'material particular' in the applications for the licences. Mr Oshry stated that within the last three years he was not concerned in the management of two corporations that were the subject of a winding up order or had an administrator appointed. However, the undisputed evidence before the Tribunal is that Mr Oshry was concerned in the management of Epic Entertainment and Subzero Entertainment (both corporations). Both corporations were the subject of a winding up order or had an administrator appointed.
As the applicants have had an opportunity to file evidence and submissions in regard to the respondent's contention that the information supplied by Mr Oshry was false or misleading and have failed to do so or explain why they have failed to file any evidence, the respondent submits the Tribunal should make an inference that Mr Oshry's evidence would not have assisted the applicants. The respondent relies on Jones v Dunkel [1959] HCA 8; 101 CLR 298.
The respondent submits that the Tribunal is not precluded from making its decision on the basis of s 15(2C) of the SI Act because s 63 of the ADR Act requires the Tribunal to review decisions, not the grounds upon which the decisions were made. The decision was made by the Commissioner exercising a power under s 26(1A) of the SI Act and not under cl 13 of the SI Regulation.
The respondent submits that s 63 of the ADR Act requires the Tribunal to consider any mandatory ground for revocation of the licences enlivened under the statute when making the correct and preferable decision.

[15]

Interpretation of clause 13 of the SI Regulation

The parties are in dispute as to whether cl 13(1)(b) of the Regulation applies to corporations. The starting point is the consideration of the text of the provision, in its context and with regard to its purpose. ZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 at [14] per Kiefel CJ, Nettle and Gordon JJ and at [37]-[39] per Gageler J; Thiess v Collector of Customs (2014) HCA 12; 250 CLR 664 at [22].
In interpreting Regulations and Acts, regard is had to s 33 of the Interpretation Act 1987: In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.
The objects and purposes of the SI Act have been described as indicating the need to 'maintain public safety and to ensure that those who are licensed to operate in the industry are appropriately qualified and are persons of integrity': See O'Neill v Commissioner of Police, NSW Police Force [2005] NSWADT 130 at [37].
The SI Act and the SI Regulation comprehensively provide for the licencing and regulation of persons in the security industry by identifying circumstances which deem persons unsuitable to hold licences. Avilion Group Pty Ltd v Commissioner of Police [2010] NSWCA 275 at [24]. The SI Act and the SI Regulation regulates the conduct of corporations who are licence holders and the conduct of close associates of the corporations.
A reference to a 'person' includes a corporation: ss 5(2) and 21 of the Interpretation Act unless a contrary intention is shown: Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334 at 347-9
Both parties accepted that the heading to cl 13(1) - 'Mandatory grounds for refusal - individual' is not to be taken to be part of the SI Regulation; s 35(2)(a) of the Interpretation Act. However, the applicants contend that the heading confirmed the ordinary meaning conveyed by the text of the provision consistent with its interpretation and despite there being no extrinsic material made reference to ss 34 and 35(5) of the Interpretation Act.

[16]

Terms of clause 13 of the Regulation

Clause 13 sets out the grounds for refusal to grant licences within section 15(4) of the SI Act. The first mandatory ground in cl 13(1)(a) applies to applicants and close associates of the applicant and the circumstances refer to the applicant, being an undischarged bankrupt.
Clause 13(1)(b) applies to applicants and close associates of the applicant and the circumstances include; 1. at any time in the 3 years immediately preceding the applicant or a close associate to the applicant for the licence was: 1. concerned in the management of a corporation when the corporation was the subject of a winding up order; or 2. when a controller or administrator was appointed, 1. unless a winding up of the corporation occurred by way of a members voluntary winding up or 2. the Commissioner is satisfied that the person took all reasonable steps to avoid the liquidation or administration.
Clause 13(2) explains the meaning of 'reasonable steps' referred to in cl 13(1)(a) and 13(1)(b)(ii).
Clause 13(3) is a mandatory ground for refusal to grant a licence to a corporation if it was subject of a winding up order or at any time in the three years immediately preceding the grant of licence was subject of a winding up order or for which a controller or administrator was appointed.
Clause 13(4) is a discretionary ground for refusal on the basis that an applicant or a close associate of the applicant has, within the three years before the application for the licence was made contravened any provision of the Act or the Regulations under the Act.
Clause 13(5) is a discretionary ground for refusal a licence, on the basis that the applicant or close associate of the applicant has within a period of three years was made had been found guilty of an offence and particular sections in chapter four of the Australian Consumer law. These contraventions are in regards to natural persons and corporations.
The only ground that is limited to corporations is cl 13(3). Clauses 13(1), (4) and (5) are not constrained to corporations. They apply to corporations as well as to natural persons. Clause 13(1)(a) applies to natural persons and close associates and clause 13(1)(b) applies to corporations and close associates. Clauses 13(4) and (5) apply to applicants and close associates while cl 13(3) only applies to applicants.
The heading to cl 13(1) is confusing if reference is not made to the content of the subclauses. However, once a proper consideration of the clause as a whole is undertaken together with other provisions in SI Regulation such as cl 14, it is a clear that cl 13(1) does apply to natural persons and corporations. Clause 13(1)(a) applies to natural persons and close associates and cl 13(1)(b) applies to corporations and close associates. Likewise, sections 14, 15 and 26 of the SI Act applies to applicants that are natural persons and corporations. Cl 13 provides additional grounds for a refusal to grant a licence for the purposes of s 15 of the SI Act and is picked up in s 26(1A) of the SI Act which is the power to revoke a licence.
Consideration of an application for a licence and for the revocation of a licence is undertaken on the basis of a number of mandatory and discretionary criteria set out in ss 15 to 17 and 26 of the SI Act. As already mentioned, section 15(4) states that additional grounds may be made in the SI Regulation. The criteria also applies in certain cases to 'each close associate of a person'.
In Banerjee v Commissioner of Police [2018] NSWCA 283; (2018) 98 NSWLR 730, the Court of Appeal found at [13] that an administrator of a corporation applying for a licence would be considered to be a close associate of the person, making clear that the reference to the term 'person' in ss 15 and 16 includes a reference to a corporation.
At paragraph [16] the Court of Appeal stated that clause 13(1) … provides … an understanding of the statutory scheme which applies equally to individuals who have entered bankruptcy, or applied for relief from insolvency, and to corporations in similar circumstances. The observations made by the Court of Appeal are patently accurate.
The applicants' reliance on the fact that cl 13(3) only applies to corporations as a means to read down cl 13(1)(b) is misconceived. Each of cl 13(1) to cl 13(5) operates in accordance with its terms. The fact that there is express reference to a corporation in cl 13(3) cannot support an implication that cl 13(1)(b) excludes a reference to a corporation. In its terms, cl 13(1)(b) contains no express or implied limitation on the categories of persons to whom it applies. Contrary to the arguments made by the applicants, cl 13(1)(b) does explicitly apply to conduct of corporations.
The Tribunal finds that cl 13(1)(b) of the SI Regulation applies to a corporation and to the corporation's close associates. Mr Oshry was a close associate of the applicants.

[17]

The decisions under review and the Tribunal's jurisdiction

The issue for determination is whether the respondent can rely on s 15(2C) of the SI Act before the Tribunal in circumstances where there was no reference to s 15(2C) in the reasons for the revocation of the licences. The answer to this question depends on the Tribunal's jurisdiction as provided in the ADR Act and the terms of the enabling statute conferring the rights; see Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286 (Shi) at [25] per Kirby J; at [92] per Hayne and Heydon JJ and at [132] per Kiefel J.
At the time the licences were revoked, the decision was made because the applicants failed to disclose information in regard to a close associate. The first time that the respondent raised the issue of the applicant providing false or misleading information was during the application for a stay of the decision on 7 July 2022. On 4 August 2022, the solicitors for the respondent wrote to the solicitors for the applicants informing them that at the Tribunal hearing, they may make submissions that the licences were to be cancelled pursuant to s 15(2C) of the SI Act and or cl 13(1)(b) of the SI Regulation.
The administratively reviewable decision is the decision made by the respondent: s 7(1) of the ADR Act. The decision made by the respondent was to revoke the licences: s 6(1)(c) of the ADR Act. Section 6(2) of the ADR Act requires the decision to be made in the exercise of a function. The respondent has a function under the SI Act to comprehensively regulate the security industry by issuing security licences and revoking licences pursuant to the terms of the SI Act.
The reasons for the revocation were provided to the applicants pursuant to ss 49 and 53(2)(d)(ii) of the ADR Act. The reason for the revocation was that a close associate of the master security licence was concerned in the management of a corporation, that was the subject of a winding up order or had a controller or administrator appointed. The notification of the revocation stated that as a 'result of the operation of the legislative requirements as described above, I have revoked the licence'.
For the purpose of reviewing a decision, section 63 of the ADR Act sets out the Tribunal's power. The Tribunal may exercise all the powers and discretions that are conferred on the person who made the decision, who is a person with special expertise or knowledge. The Tribunal must have regard to the decision of the decision maker as part of the material before the Tribunal. However, ultimately it is for the Tribunal to reach its own decision based upon the relevant material which may be different to the material relied on by the decision maker.
In considering what is the correct and preferable decision, the Tribunal must address the same question the original decision maker was required to address. As Kiefel J said in Shi at [142]; identifying the question for determination will generally determine the facts which may be taken into account.
The question before the decision maker was whether in the exercise of all of her functions that are conferred or imposed on her by the delegated legislation, namely the legislative regime in the SI Act and the SI Regulation, she should have revoked the licences. The same question must be answered by the Tribunal.
However, the fact that the Tribunal must address the same question as the decision maker, must not to be confused with the Tribunal's powers to consider evidence and submissions that may not have been before the decision maker. The review of the respondent's decision conducted by the Tribunal is a review de novo. Colloquially referred to as 'standing in the shoes of the decision maker' or considering the matter 'afresh'. It is not an appeal from the decision-maker's decision.
The task for the Tribunal is to determine whether the respondent's decision to revoke the licences is the correct and preferable decision having regard to the material before it. The Tribunal is not bound to make the decision on the basis made by the respondent or in the manner contended for by the applicant. The Tribunal must, after considering all the material before it and providing the parties with procedural fairness, make its own decision.
In Commissioner of Police v Sleiman & AVS Group of Companies Pty Ltd [2011] NSWCA 21; (2011) 78 NSWLR 340, Sackville AJA at [156] put the concept in the following terms: On this basis, the effect of s 63(2) of the ADT Act (which provides that the ADT may exercise all functions conferred or imposed by statute on the original decision-maker) is that, on an application to the ADT to review a revocation decision, all references to " the Commissioner " in ss 15(6) and 26(1A) of the SI Act are replaced by references to the ADT: AVS (No 1) at [155], per Campbell JA. When read with s 29(3) of the SI Act , these provisions appear to be sufficient to enable the ADT to take into account Criminal Intelligence in reviewing a decision of the Commissioner to revoke a licence on the ground that the holder is not a fit and proper person to hold the licence.
As White J explained in Kocic v Commissioner of Police, NSW Police Force [2014] NSWCA 368; (2014) 88 NSWLR 159 at [128]: The question before the Tribunal is not whether the Commissioner made the correct decision on the material before him.
In Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; (2019) 266 CLR 250, Kiefel CJ, Keane and Nettle JJ at [14]-[15] said: It (AAT) is subject to the same general constraints as the original decision-maker and should ordinarily approach its task as though it were performing the relevant function of the original decision-maker in accordance with the law as it applied to the decision-maker at the time of the original decision. Depending on the nature of the decision the subject of review, the AAT may sometimes take into account evidence that was not before the original decision-maker, including evidence of events subsequent to the original decision[15]. But subject to any clearly expressed contrary statutory indication, the AAT may do so only if and to the extent that the evidence is relevant to the question which the original decision-maker was bound to decide; really, as if the original decision-maker were deciding the matter at the time that it is before the AAT. The AAT cannot take into account matters which were not before the original decision-maker where to do so would change the nature of the decision or, put another way, the question before the original decision-maker. (footnote omitted)
In Frugtniet v Administrative Decisions Tribunal (Appeal Panel) & Anor; Brian Frugtniet v Administrative Decisions Tribunal (Appeal Panel) & Anor [2005] NSWCA 257, the Court of Appeal held at [45] that in deciding the correct and preferable decision, the Tribunal must not confine the inquiry 'within the particulars of the reason, ground or matter specified in the original notice or notices.'
In Aerolink at [5]-[6] the Administrative Appeals Tribunal refused permission for the respondent to lead evidence in relation to other alleged breaches of the Civil Aviation Act 1988 (Cth) as it would result in 'trial by ambush'. The facts in Aerolink are entirely different to these proceedings. The applicants had ample opportunity before the hearing to file evidence and submissions in response to the respondent's reliance on s 15(2C) of the SI Act. I reject that there has been trial by ambush.
For the reasons set out above, I reject the applicants' submission that the Tribunal must either accept or reject the grounds relied on by the respondent and cannot consider other relevant factual material in coming to its own decision so long as the Tribunal's decision is within the functions conferred or imposed on the administrator who made the decision: s 63(2) ADR.
NCAT can consider a statutory power, namely s 15(2C) of the SI Act to decide whether the correct and preferable decision is to revoke the licences in circumstances whereas namely s 15(2C) of the SI Act is not relied upon by the decision maker.
I do not read the decision in CPJ16 as being inconsistent with the decisions in Frugtniet and Shi but if it is, I would not follow it. The Court of Appeal's decision in Frugtniet is authority that the Tribunal must decide for itself the correct and preferable decision and in so doing it may exercise all the functions that are conferred or imposed by the relevant legislation on the administrator who made the decision. This includes considering material and submissions not before the decision-maker.

[18]

Revocation based on knowingly supplying false information

Section 26 of the SI Act deals with revocation of licences. Section 26(1)(b)(i) is a discretionary power to revoke a licence if an applicant supplies information that was in the applicant's knowledge, false or misleading in a material particular in or in connection with the application for a licence.
Section 26(1A) mandates the Commissioner to revoke a licence where the Commissioner is satisfied that if the person was applying for a licence, it would be refused. This includes 15(2C), the Commissioner must refuse to grant a licence if the applicant supplied information that is (to the applicant's knowledge) false or misleading in a material particular in, or in connection with the application.
In this proceeding, the respondent sought to rely on s 15(2C) of the SI Act as well as ss 15(4), 15(5) and 26(1A) of the SI Act and clause 13 of the Regulation which were referred to in the letter revoking the licences.
The respondent's claim against the applicants has been consistent. It is that the applicants failed to disclose the correct information when they applied for the licences. Had they disclosed the correct information when they applied for the licences, their licences would not have been granted. Cl 13(1)(b) of the SI Regulation is a mandatory ground.
The respondent submits that the Tribunal make a factual finding that the applicants knowingly provided false or misleading information on the applications for the licences where Mr Oshry gave information that within the last three years, that he had not been concerned in the management of a corporation that was the subject of a winding up order or had an administrator appointed.
Those facts were put to the applicants prior to the respondent's decision to revoke the licences. They had an opportunity to disagree with the facts and provide further information to the respondent but they failed to do so. The applicants had an opportunity to explain why the information on the application forms was false and what role Mr Oshry had in the winding up of Subzero and Epic.
The applicants had another opportunity to file evidence and submissions in regard to Mr Oshry's dealings before the Tribunal. They had an opportunity to state that they did not know that the information on the application was false or misleading or to provide reasons as to why the information on the application was false or misleading. They failed to provide any information to the Tribunal. At all material times the applicants were legally represented. In their closing submissions the applicants submitted that they did not put on evidence because the respondent relied on the wrong parts of the SI Regulation.
Where there is a finding that the person supplied information that is false or misleading but there is no direct evidence of the person's knowledge, a link between these matters may be established by inference from the available facts: Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262 (Seltsam).
In Seltsam, Spigelman CJ explained at [88] that the test to be applied to whether it is permissible to draw inferences from the evidence is whether, "on the basis of the primary facts, it is reasonable to draw the inference". At [87], Spigelman CJ quoted from the following passage in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152; [1939] 3 All ER 722 at 169-170 about the distinction between inferences and conjecture or speculation: Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some case the other facts can be inferred with as much practical certainty as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.
For an inference to be drawn, there must be more than 'conflicting inferences or equal degree of probability so that the choice between them is [a] mere matter of conjecture'. Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5. Some fact must be found which positively suggests or provides a reason for the circumstances particular to the case, that a specific event happened or a specific state of affairs existed. Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 305.
While the Tribunal is not bound by the rules of evidence and must act according to good equity, good conscience and the substantial merits of the case; see s 73(3) of the CAT Act, the principles in Jones v Dunkel are applicable. A party cannot simply fail to file any evidence without any explanation to avoid a finding that there was a deficiency of evidence. Whether the applicants knew that the applications were false in a material particular was within their knowledge, yet the applicants determined to not file any evidence in regard to this significant material fact.
The respondent submits that in the absence of any explanation and failure to give evidence by the applicants leads to an inference that the uncalled evidence would not have assisted their case. Jones v Dunkel at 308, 312 and 320-321. The respondent submits that the only inference open to the Tribunal was that the provision of the false information was made knowingly by the applicants.
The Tribunal is satisfied based on the material before the Tribunal that Mr Oshry was in fact concerned in the management of a corporation that was the subject of a winding up order or had an administrator appointed three years prior to the applications for security licences. Epic was wound up on 5 October 2015 and ERA applied for a licence on 22 May 2017. Subzero was wound up on 3 May 2019 and PSG applied for a licence on 24 December 2019.
The applicants did not challenge the truth of the documents relied on by the respondent. The applications were submitted to the respondent by the applicants. The applications were signed by the proper officer of the applicants. There is no suggestion by the applicants that they were mistaken about the information they provided on the applications. The applicants simply failed to file any evidence or make any submissions about their knowledge as to the material they provided to the respondent in the applications for the licences.
The Tribunal is satisfied, based on the material before it that the false information on the application form in regard to Mr Oshry was made knowingly by the applicants. Specifically, the Tribunal notes the applications were signed by Mr Oshry and there was a relatively short period of time between the winding up and administration of Subzero and PSG's application for licence.

PSG Security Group Pty Ltd v Commissioner of Police, NSW Police Force; ERA Security Group Pty Ltd v Commissioner of Police, NSW Police Force

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