Victorian Civil and Administrative Tribunal|2010-12-02

The Applicant is a 'prohibited employee' within the meaning of s 35A of the Motor Car Traders Act 1986 ('the MCT Act') and hence cannot be employed by a motor car trader in any customer service capacity. He is designated as a 'prohibited employee' because he falls within the scope of paragraphs 35A(1), (ab) and (b) of the MCT Act, which state:

(1) A motor car trader must not employ in any customer service capacity in connection with her, his or its business any person who the motor car trader knows -

(b) has, within the last 10 years, been convicted or been found guilty of a serious offence (whether or not a conviction was recorded) (unless the person has obtained permission under section 29B);..."

As is apparent from s 35A, a person who is a 'prohibited employee' may, despite s 35A(1), be employed in a customer service capacity if they have obtained permission from the Business Licensing Authority ('the Authority).
In November last year, the Applicant made an application to the Authority for permission to be employed by a licensed motor car trader in a customer service capacity, pursuant to ss 29A(2)(c) and 29B(2)(b) of the MCT Act.
On 11 June 2010, the Authority determined to refuse the application for permission because it was not satisfied the Applicant met the condition in s 29A(3) of the MCT Act.
The Applicant has sought review by the Tribunal of the Authority's decision.

There is no real dispute as to the relevant facts. The Applicant was formerly a director of Kingstrate Pty Ltd ('Kingstrate') from 26 May 1999 to 29 December 2002. Kingstrate was a licensed motor car trader ('LMCT') but its licence was cancelled following the appointment of administrators to the business. After the appointment of administrators, a number of claims involving Kingstrate were made on the Guarantee Fund ('the Guarantee Fund' or 'the Fund') established by the MCT Act. Between 2002 and 2003, 158 claims, amounting to $396,779.36, were admitted against the Fund in relation to Kingstrate. At all relevant times, the Applicant was the sole director of Kingstrate. Accordingly, the Applicant is a person to whom s 35A(1)(ab) of the MCT Act applies and is required to obtain permission to be employed in a customer service capacity by a motor car trader.
On 7 May 2003, the Applicant was found guilty of two counts of causing criminal damage and one count of breach of an intervention order. Under s 197 of the Crimes Act 1958, a person who has been found guilty of causing criminal damage is liable to a maximum term of imprisonment of up to ten years. Under s 22 of the Crimes Family Violence Act 1987 (as it was then), a breach of an intervention order attracted a maximum penalty of up to 240 penalty units or two years imprisonment or both. Both these offences amount to 'serious offences' under the MCT Act.[1] Hence the Applicant falls within the scope of s 35A(1)(b) and is a prohibited employee.
In 2004, the Applicant applied for permission to be employed by a LMCT in a customer service capacity. Permission was granted, subject to conditions which included the Applicant undertaking to repay the amount of money claimed against the Fund. The Applicant repaid approximately $200,000 to the fund between 2004 and 2005.
On 20 April 2006, the Applicant was declared a bankrupt pursuant to a sequestration order made by the Federal Magistrates' Court. The Applicant will not be discharged from bankruptcy until May 2014.
On 4 July 2006, the Respondent revoked the permission to be employed by a LMCT due to the Applicant's failure to make a payment of $50,000 as required by the permission conditions.

The central issues in these proceedings are the proper construction of s 29A(3) of the MCT Act and the role of the Tribunal on review.
Section 29A of the MCT Act provides:

Person involved in Guarantee Fund claim may regain licence etc. in special circumstances

(a) in relation to whom a claim has been admitted against the Fund;

(b) who was a partner or director of, or a person concerned in the management of, a partnership or body corporate that has had a claim admitted against the Fund in relation to an act or omission that occurred at the time the person was a partner or director of, or a person concerned in the management of, the partnership or body corporate.

(1A) For the purposes of this section, person includes a partnership.

(a) to prevent a suspension under section 29 from taking effect or for the removal of a suspension under that section; or

(b) for permission to hold, or to continue to hold, a licence; or

(c) for permission to be employed as an employee of a motor car trader in a customer service capacity (within the meaning of section 35A); or

(d) for permission to be a partner or director of, or a person concerned in the management of, a motor car trader.

(2A) An application under this section must be in the form approved by the Authority and contain any information and be accompanied by any documents required by the Authority.

(2B) In considering an application under this section, the Authority may -

(b) require the applicant to provide any further information that the Authority thinks fit in the manner required by the Authority;

(2C) The Authority may refuse to give its permission if the applicant does not provide the further information required, or his or her consent for the Authority to obtain that information, within a reasonable time after the requirement is made.

(3) Subject to subsection (4), the Authority may grant the application if it is satisfied -

(i) the person has refunded all amounts paid out of the Fund in respect of the claim; or

(ii) the person has agreed to refund all amounts paid out of the Fund in respect of the claim; and

(b) that having regard to the conduct of the person before and after the claim, there is no reasonable expectation that the person will not comply with this Act and the regulations in future; and

(4) The Authority may grant an application by a partnership or body corporate whose licence would otherwise be suspended under section 29(1B) if the Authority is satisfied that the granting of the application is not contrary to the public interest. [emphasis added]

In the decision subject to review the Authority advised the Applicant of the statutory basis for refusing the application in both the notice of refusal and the accompanying letter, in these terms:

"it is not possible for the BLA to grant you permission under section 29A of the Act because you have neither repaid the sum of $196,703.62 (ie. the outstanding balance owed to the Motor Car Traders Guarantee Fund) nor agreed to repay that sum. In these circumstances, it is necessary for the BLA to consider the grant to you of permission under section 29B of the Act.

In light of the above, the BLA has determined to refuse to grant you permission to be employed by a licensed motor car trader in a customer service capacity because you have not met either of the criteria in section 29A(3) of the Act ."

There is no dispute as to the fact that the Applicant has not refunded all amounts paid out of the Fund. Nor has the Applicant agreed to refund all amounts which have been paid out of the Fund. It necessarily follows that the requirements of s29A(3)(a) have not been met. It was on that basis that the Authority refused the Applicant's application.
On review the Applicant submits that he is unable to meet the requirements of s29A(3)(a) because entering into any arrangement to repay the Fund would amount to a breach of the conditions pertaining to his bankruptcy. It is also submitted that 'the Tribunal is not bound as the Respondent was by sections 29A and 29B and may exercise its discretion pursuant to Section 51 of the VCAT Act'. Further, the Applicant's reply submission states:

"It is submitted if the Tribunal is of the view the applicant is not legally able to comply with the requirements of s29A(3) then that is a matter which the Tribunal is able to take into account in assessing the respondent's refusal pursuant to s29A(3)."

It is convenient to deal first with the proper construction of s 29A(3) and then turn to the Tribunal's powers on review. Section 29A(3) provides that the Authority may grant an application for permission to be employed by a motor car trader in a customer service capacity if the Authority is satisfied as to the matters specified in paragraphs 29A(3)(a), (b) and (c). The Authority must be satisfied as to each of these matters, as is clear by the use of the conjunctive 'and' at the end of paragraphs 29A(3)(a) and (b).
The matters specified in paragraphs 29A(3)(a) (b) and (c) are jurisdictional requirements. This follows from the introductory words 'the Authority may grant the application if it is satisfied' as to the matters set out in paragraphs 29A(a)(b) and (c). Before the Authority may grant the permission sought each of the matters must be satisfied. The requirement in s 29A(3)(a) is a jurisdictional fact and is a precondition to the valid exercise of the power to grant the permission.[2]
Applying that construction to the facts here the Applicant must fail as he has not satisfied the Authority as to the existence of the fact specified in s 29A(3)(a). But here the Applicant submits that on review the Tribunal is in a different position to the Authority.
It is submitted that the Tribunal may, in effect, waive the need to comply with s 29A(3)(a) having regard to the fact that the Applicant is unable to comply with this requirement because of the conditions pertaining to his bankruptcy.
It is common ground that the enabling Act relevant to this proceeding is the MCT Act and that it confers review jurisdiction on the Tribunal. Section 32(1) of the MCT Act provides:
1. Application for review
  - (1) A person whose interests are affected by a decision of the Authority under section 13, 14, 17, 29A, 29B, 29C, 29D or 33 may apply to the Tribunal for review of the decision.
On review the Tribunal stands in the shoes of the original decision maker and must determine the correct decision on the material before it. The review is conducted without any presumption as to the correctness or otherwise of the decision subject to review. The Tribunal is not confined to the material upon which the original decision was made and may receive evidence or material which was not before the original decision maker.[3]
The functions of the Tribunal in exercising its review jurisdiction are set out in s 51 of the Victorian Civil and Administrative Tribunal Act 1998. Subsection 51(1) provides:
1. Functions of Tribunal on review
  - (1) In exercising its review jurisdiction in respect of a decision, the Tribunal -
    - (a) has all the functions of the decision-maker; and
    - (b) has any other functions conferred on the Tribunal by or under the enabling enactment; and
    - (c) has any functions conferred on the Tribunal by or under this Act, the regulations and the rules ...
The Applicant relies on the judgment of Neave JA in Davidson v Victorian Institute of Teaching ('Davidson')[4] in support of the submission that the Tribunal is not constrained by s 29A of the MCT Act. In particular he relies on the following passage from her Honour's judgment:

"... the Tribunal has all the functions of the decision maker. Its powers should be liberally construed, 'in accordance with the flexibility that is such a feature of the Tribunal's jurisdiction." [citations omitted][5]

Davidson is authority for the proposition that in exercising its review jurisdiction the Tribunal is not limited to reviewing the determination of the primary decision maker but may also review the findings of fact upon which that determination was based. I am not persuaded that Davidson supports the contention advanced on behalf of the Applicant.
The passage from her Honour's judgment to which the Applicant referred is to be understood as a reference to the Tribunal's broad procedural powers. This is apparent from the footnote to the passage:

"Dretzke v Boroondara CC [1999] VCAT 920. See also s.98(1)(d) of the VCAT Act, requiring that each proceeding is conducted with "as little formality and technicality, ... as the requirements of this Act and the enabling enactment and a proper consideration of the matters before it permit."

As a creature of statute, the Tribunal has no inherent jurisdiction. It only has those powers expressly conferred on it by the VCAT Act and has such jurisdiction as is conferred on it by Victorian legislation, referred to as 'enabling enactments' in the VCAT Act. [6] As Nettle JA observed in Victorian Workcover Authority v AB Oxford Cold Storage Co Pty Ltd:[7]

"The Victorian Civil and Administrative Tribunal is not a court. It is a statutory tribunal. Its function on a review of an administrative decision is not to sit in appeal from the decision, but to re-exercise the function of the original decision maker." [emphasis added]

In this case there is nothing in the VCAT Act, the Regulations or the Rules which would permit the Tribunal to apply a different test to that which is specified in s 29A(3) of the MCT Act. It follows that, pursuant to s 51(1) of the VCAT Act, the Tribunal stands in the shoes of the Authority and is subject to the same legislative constraints. As Bowen CJ and Deane J observed in Drake v Minister for Immigration and Ethnic Affairs,[8] dealing with the merits review function of the Administrative Appeals Tribunal,

"The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal. The Act offers little general guidance on the criteria and rules which the Tribunal is to apply in the performance of its task of reviewing administrative decisions which are subjected to its surveillance. Even in a case such as the present where the legislation under which the relevant decision was made fails to specify the particular criteria or considerations which are relevant to the decision, the Tribunal is not, however, at large. In its proceedings, it is obliged to act judicially, that is to say, with judicial fairness and detachment. In its review of an administrative decision, it is subject to the general constraints to which the administrative officer whose decision is under review was subject, namely, that the relevant power must not be exercised for a purpose other than that for which it exists that regard must be had to the relevant considerations, and that matters 'absolutely apart from the matters which by law ought to be taken into consideration' must be ignored." [citations omitted][9] (emphasis added)

While I readily accept the proposition that the Tribunal's powers should be liberally construed, the interpretation adopted must be restrained within the confines of the actual language employed and what is fairly open on the words used.[10] The words of the relevant legislation must be examined first and if only one interpretation is fairly open then that must be the meaning attributed to the words. In the circumstances of this case the language of s 29A(3)(a) is clear. It sets out a jurisdictional fact which must be established before the power to grant the permission may be exercised. That jurisdictional fact has not been established in this case and so there is no power to grant the application.
A number of the submissions advanced on behalf of the Applicant raised the Applicant's difficult financial circumstances and the impact upon him of a decision to refuse the permission sought. These matters are relevant to the public interest considerations in s 29A(3)(c). But the Applicant must satisfy each of the requirements in s 29A(3). The central issue in these proceedings is the proper construction of s29A(3) of the MCT Act and the role of the Tribunal on review. On review I am obliged to apply the terms of s 29A and the Applicant has failed to satisfy the jurisdictional requirements set out in s 29A(3)(a). It follows that the application for review must be dismissed and the Authority's decision affirmed.
In the circumstances it is unnecessary for me to consider the Applicant's review application in respect of his s 29B application.

[1] Section 3 of the Motor Traders Act 1986 ('MCT Act') defines a 'serious offence' to mean: "an offence involving fraud, dishonesty, drug trafficking or violence punishable by imprisonment for 3 months or more."

[2] The matters in section 29A(3)(b) and (c) of the MCT Act are also preconditions to the exercise of the power, and may be characterised as jurisdictional facts applying the broad definition of that term used by Gummow J in Minister for Immigration and Ethnic Affairs v Eshetu (1999) 197 CLR 611.

[3] See s 51 of the Victorian Civil and Administrative Tribunal Act 1998, Davidson v Victorian Institute of Teaching [2006] VSCA 193 (Unreported, Supreme Court of Victoria, Court of Appeal, Maxwell P, Chernov and Neave JJA, 6 September 2006) [6] (Neave JA). In some circumstances it will be appropriate for the Tribunal to take the findings and determination of the Board into account and to give them some weight: Ha v Pharmacy Board of Victoria [2002] VSC 322; (2002) 18 VAR 465 [74] - [84] (Gillard J).

[4] [2006] VSCA 193 (Unreported, Supreme Court of Victoria, Court of Appeal, Maxwell P, Chernov and Neave JJA, 6 September 2006).

[6] Herald and Weekly Times Pty Ltd v Victorian Civil and Administrative Tribunal & Ors [2006] VSCA 7 (Unreported, Maxwell P, Eames and Nettle JJA, 9 February 2006) [27] (Maxwell P).

[7] (Unreported, Supreme Court of Victoria, Court of Appeal, Nettle and Ashley JJA,1 September 2006) [29] (Nettle JA).

[10] Khoury v Government Insurance Office of New South Wales [1984] HCA 55; (1984) 165 CLR 622, 638 (Mason, Brennan, Deane and Dawson JJ).

Rimanic v Bus Licensing Authority (Occupational and Business Regulation) [2010] VCAT 1997 (2 December 2010)

Rimanic v Bus Licensing Authority

At a glance

Court

Decision date

Source

Judgment (48 paragraphs)

Parties

Cases Cited (4)

Rimanic v Bus Licensing Authority (Occupational and Business Regulation) [2010] VCAT 1997 (2 December 2010)