Shawmac Industries Australia Pty Ltd v Commissioner of Police, NSW Police Force - [2018] NSWCATAD 279 - NSWCATAD 2017 case summary — Zoe

NSWNSWCATAD

Shawmac Industries Australia Pty Ltd v Commissioner of Police, NSW Police Force

[2018] NSWCATAD 279

NCAT Administrative and Equal Opportunity|2017-09-12

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Court

NCAT Administrative and Equal Opportunity

Decision date

2017-09-12

Source

Original judgment source is linked above.

Judgment (24 paragraphs)

[1]

Background

Daniel Shaw, is the Managing Director and, with his wife, is one of two shareholders of Shawmac Industries Australia Pty Ltd (Shawmac or the company), the Applicant in these proceedings. Mr Shaw has been authorised to possess and use firearms by way of a personal firearms licence for approximately 16 years. During much of that time he worked with the Department of Industries Local Land Services in feral animal control. In April 2016, Shawmac applied for, and was granted, a Prohibited Weapons Dealer Permit (PWD Permit), which is due to expire on 7 July 2021. Shawmac and its employees (who are issued with an Employee Authority Permit) are authorised to possess, buy, sell, manufacture, repair or hire, silencers (also known as suppressors) in the course of carrying on a business as a weapons dealer. Also in April 2016, Shawmac applied for and was granted a Prohibited Weapons - General Permit for possession of a silencer. That permit, which is due to expire on 28 July 2021, allows for one silencer to be acquired for each of the following firearm calibres: .22cal, .30cal, .45cal. In May 2016, Shawmac sought a Commissioner's Permit - Business. That permit was issued on 29 July 2016, for 5 years, and authorises the possession of a prohibited firearm, being a firearm that has been fitted with a silencer.
On 7 October 2016 Senior Constable Garry Hayden, the then Licensing Co-ordinator at Nowra attended the company's premises with Constable Anthony Jory and they conducted an inspection of the Applicant's premises (the inspection). Senior Constable Hayden identified alleged breaches of both the Firearms Act 1996 (FA Act) and Weapons Prohibition Act 1998 (WP Act). As a result, Mr Shaw's personal ABD firearms licence, the prohibited firearm permit, prohibited weapon permit and PWD Permit were all suspended. As a result of the undertaking given by Mr Shaw, Police declined to lay charges and issued a verbal warning, and in June 2017 the suspensions of the prohibited firearm permit, prohibited weapon permit and PWD Permit were lifted. Mr Shaw's personal firearms licence expired while suspended, but was reissued for category AB firearms, to expire on 24 August 2022, subject to conditions.

[7]

"Deposits" for silencers

Senior Constable Hayden recorded in the COPS event in respect of the inspection, that the company's website contained an advertisement that 30% deposit was required for retail purchases [which] "(Includes application package)". In his evidence Mr Shaw said that the company's website did state that application guides had been developed to assist in the complicated application process and that an application package was available with a deposit on a silencer.
When Police examined the company's books 3 "Customer Order Forms" were located in which $250 had been recorded by way of deposit. There was no dispute that each buyer had not yet obtained a permit for a silencer.
Mr Shaw's evidence was to the effect that the company's business practice was to support people through the licensing process for a suppressor permit. This involved selling, for $250, an "application support package", which contained all the forms, templates, facts sheets and supplementary information required to submit an application to the Firearms Registry (Registry). If the customer was unsuccessful in obtaining a permit, the company would refund the $250, but, if successful, the company take the $250 off the price of a suppressor; there was never any requirement to purchase a suppressor once the permit was granted. Mr Shaw acknowledged in his evidence that, in hindsight, the process was an error. Mr Shaw was adamant though that the intent was to never take a deposit for a suppressor from a person without a licence, and he submitted that it was clear that at the time the company was selling an application support package and not a firearm suppressor. His unchallenged evidence was that, in discussions with the Registry, it was agreed that the practice assisted the Registry by weeding out incomplete or hopeless applications.
However, in none of the order forms was the option of "retail application guide required?" selected. Further, the form explicitly refers to a "deposit" for a silencer. In cross examination Mr Shaw said the 2 processes had been put on the one form but that the practice was to charge for the application package. The intention was never to sell a silencer to anyone who was unable to obtain a licence. He denied that the sale was conditional on the customer obtaining a licence, but that the $250 was refundable if unsuccessful. He agreed that the effect was that the application was free.
He said he now knows that "sell" includes "going out and seeking commitment" and agreed that the transaction could be seen as "selling", even though that was never the intent. He also accepted that there had been "negotiations", but he had never intended to sell to an unlicensed person.

[8]

"Sale" to Mr McCall

The company's sales book also recorded the sale of three silencers to Ian McCall, an employee of the company. At that time, Mr McCall had taken possession of two silencers, with the third being in pieces. According to Senior Constable Hayden, Mr McCall was, at the time, only authorised to possess only one silencer.
In his Response, Mr Shaw asserted that Mr McCall "only ever possessed 2 suppressors", one of which was authorised to possess for his contract vermin control business. Mr Shaw's unchallenged evidence was that the third was incomplete and unusable and therefore was not actually a "suppressor". Because Mr Shaw was about to go on holidays and, as Mr McCall was going to complete a prototype while he was away, the third suppressor was recorded in advance. Mr McCall said in his evidence that the pieces were in a box in the safe at the company's premises.
Mr McCall said that he needed a silencer for his vermin control business in which he is contracted by the State government and local councils, and where there is a need for noise abatement. He said that only one of the "sales" in the company's sale book was actually a "sale" to him for the purpose of his business.
Mr McCall said the other "sale" was recorded as the silencer was in his possession for the purposes of research and development at his premises, and would be returned to the company's premises when the testing was complete. He said that he was unaware that the silencer could not be taken offsite, but this was necessary for testing, which could not be done at the company's workshop. An authorised employee under a weapons dealer permit, however, is only permitted to possess a silencer in the course of carrying on business as a weapons dealer and only at the premises specified in the permit: s 8(1) WP Act. Mr Shaw conceded in cross-examination that he had not been aware that an employee could only have possession at the employer's premises.
In his evidence, Mr Shaw said that Mr McCall had only ever purchased one silencer. The other one (and the one in pieces) were in his possession as an employee of the company pursuant to the company's PWD Permit. Both Mr Shaw and Mr McCall gave evidence that recording the second "sale" of the silencer being tested was to scrupulously record every item that either came into or left the company's premises. In cross-examination Mr Shaw said, on the advice of Senior Constable Hayden, he now has a risk management register to record the whereabouts of all firearms, in lieu of confusingly recording them in the sales book.

[10]

Unauthorised possession of prohibited firearm: s 7 of the FA Act

Section 7 of the FA Act states, relevantly, that a person must not possess a prohibited firearm unless the person is authorised to do so by a licence or permit. The company has a permit for possession of a prohibited firearm, being a firearm that has been fitted with a silencer. Mr Shaw also has a Category D licence.
During the inspection Police also checked Mr Shaw's firearms safe storage facilities. At the time his personal licence authorised the possession and use of category AB firearms for the genuine reasons of vertebrate animal control, animal welfare and recreational hunting/vermin control; and the use of Category D firearms for the genuine reasons of contract shooter and government agency.
Police observed that Mr Shaw was in possession of four firearms which were not registered to him, but were registered to a Mr Hernando, who Mr Shaw said, was a close personal friend. According to Senior Constable Hayden Mr Shaw said that he was "in the process" of purchasing the four firearms but had not yet made an application for permits to acquire those firearms as he had only just returned from holidays. Mr Shaw reportedly told Police that he had had the firearms for several weeks.
One of the firearms was an SKS semi-automatic rifle. Mr Shaw said, in his Response that it was a Category D firearm and that both he and Mr Hernando held Category D licences. The evidence of Senior Constable Hayden, however, was that that firearm is explicitly excluded from Category D licences under s 8 of the FA Act. Also, it may be prohibited under Item 5 to Schedule 1 of the FA Act, being "any self-loading centre-fire rifle of a kind that is designed or adapted for military purposes". Mr Shaw reportedly told Senior Constable Hayden that the weapon had been significantly altered from its military-style origin prior to Mr Hernando purchasing it from a licensed firearms dealer. Mr Shaw said in his evidence that he thought he told Senior Constable Hayden that it had been altered for aerial shooting.
Senior Constable Hayden wrote in his statement that "no firearms dealer would have gone near the firearm". Mr Shaw said in his Response though that "the same model of firearm and other equivalent (including of military origin) are advertised on a public gun sale website by licensed gun dealers across Australia as a Category D firearm". He now accepts that the weapon was military in origin and now accepts that it was not a Category D weapon.
The Respondent tendered an email chain between Senior Constable Hayden and another officer. There the SKS was noted as "legally registered but incorrectly registered as Cat D, possession was legal". The Respondent submitted that this was a typographical error and should have read "illegal".
Another firearm located was a Ruger 10/22, semi-automatic rifle. It was a Category C firearm and Mr Shaw did not have a licence for that category of firearm. According to Senior Constable Hayden it had previously been owned by Mr Shaw, then sold to Mr Hernando in 2005. Mr Shaw said in cross-examination that he had borrowed it with a view to purchasing it when he could afford it. He had not thought this to be a problem as he and Mr Hernando had the same category of licence. His unchallenged evidence was that the Guide said that weapons could be borrowed. He did not know at the time that he was obliged to notify police of the change of location of the weapon within 14 days.

[16]

The special position of firearms dealers

In Joseph the Appeal Panel also considered the special position of firearms dealers: 31. In our view, a dealer has a critical role in ensuring that the values and goals of the firearms legislation are upheld. Dealers must be able to be trusted by the community as persons of honesty and integrity, as persons who will be candid and open in their dealings with police, and conscientious in adhering to the strict requirements of the legislation in a wide variety of administrative matters, such as security of premises, safekeeping of weapons, bookkeeping, and transparency of transactions. 32. The Commissioner depicted the dealer as sitting at the 'apex' of the regulatory system. The Commissioner emphasised the central role played by firearms dealers in the orderly and lawful circulation of firearms in the community. We agree with the thrust of the Commissioner's submissions in this regard. … 53. Firearms dealers provide the only lawful conduit for the passage of weapons to ordinary members of the community. They must carry out their responsibilities with scrupulousness, and strictly observe the manifold business requirements to which they are subject. 54. In our view, and as reflected in the detail of the firearms law, the public has a high interest in ensuring that firearms dealers licences only be granted to persons in whom trust and confidence can be placed in relation to a range of matters. Those matters include: their business competence, their ability to implement complex standards in relation to such matters as security of weapons, recordkeeping and reporting to authorities, and their capacity, where necessary, to deal appropriately and confidentially with those authorities, in particular the police. 55. It may well be that an applicant is, in his or her day to day life, a person of good character, or at the least a person about whom nothing significantly adverse is known. There will be cases, we consider, where persons of good character in that sense nevertheless would not be acceptable for the grant of a dealer's licence, having regard to the public interest in matters of the kind to which we have referred.
More recently, in Ping Kee v Commissioner of NSW Police Force [2017] NSWCATAD 110 at [71] it was held that the standard applicable to a firearms dealer should be significantly higher than that applicable to a licensee who is licensed for personal firearms use because of the role played by dealers in the system. Mr Shaw suggested that that case was very different because the breaches in that case were very serious. The principles of the case apply, however, to firearms dealers generally and were not determined by the seriousness of the breaches in that particular matter.

[17]

Effect of non-compliance in October 2016

The decision in Joseph is also relevant in considering whether it is in the public interest for an applicant to be issued a FD licence in circumstances where criminal conduct was established on the balance of probabilities, despite charges having been withdrawn. In Joseph the applicant had applied for a FD licence, but was refused on a number of grounds. On review, the Commissioner relied on material relating to Mr Joseph's involvement in fraudulent activity, for which he was charged, but those charges were later withdrawn. After an appeal to the Appeal Panel, the applicant appealed to the Court of Appeal which held, inter alia that the evidence regarding the fraud was relevant to the application for a FD licence; the evidence established, at least on the balance of probabilities, that the applicant had engaged in pre-planned, fraudulent conduct.
In contrast to the facts in Joseph, there was no evidence that either the company or Mr Shaw has ever been charged with any offence. In particular, neither has been charged with any offence against the FA Act, Regulation or the WP Act. However, applying Joseph, evidence of breaches committed by Mr Shaw, are relevant to a consideration of whether it is in the public interest for the Applicant to be issued with a FD licence.
The facts giving rise to the alleged breaches featured strongly in the reasons for the original decision and the internal review in refusing the company a FD licence and are set out above. It is inescapable that, at least on the balance of probabilities, that Mr Shaw, and through him, the company, had failed to comply with a number of legislative obligations.
In his COPS event entry dated 9 January 2017 Senior Constable Hayden however, recorded that, in relation to the advertisement for sale/deposit matters, there had been "incorrect documentation". He recorded that, more generally, he considered Mr Shaw to have "erred in judgment which is likely to be noted as naivety". As Senior Constable Hayden was unavailable to elaborate upon his report or his statement, Constable Jory gave evidence before me. He said that he was not very familiar with firearms licensing matters and had only met Mr Shaw on 7 October 2016, at the inspection, of which he had little recollection. He recalled though that Mr Shaw was co-operative during the inspection; that Mr Shaw was upset; and that he, personally was sympathetic towards Mr Shaw.
After a formal interview in January 2017, which was several months after the inspection, Mr Shaw gave a number of undertakings that he would: 1. no longer advertise the ability for a person to enter into a sale agreement for a silencer without them being authorised; 2. no longer accept deposits or orders for a silencer without sighting a permit which authorises its possession; 3. initiate six monthly audits with Police; 4. take copies of the permits authorising the purchase of each prohibited weapons sold; 5. surrender the prohibited and the modified firearms to Police for destruction, and 6. downgrade his current firearms licence to a category AB firearms licence.
Despite the allegations that Mr Shaw had committed multiple breaches of the firearms legislation, the suspensions in respect of his various licences, were then lifted. Curiously, this included the company's PWD Permit, which authorised Shawmac and its employees to possess, buy, sell, manufacture, repair or hire, silencers in the course of carrying on a business as a weapons dealer. The original decision-maker specifically had "no issue" with that Permit. Similarly, in the Internal Review it was recorded that "despite the serious breaches identified on 7 October 2016, the Police supported the view that [the company] should be afforded another chance to remain authorised to operate as a prohibited weapons dealer..."
It was unclear to me how the Respondent can be satisfied, on the one hand, that Mr Shaw, and through him, the company, can be regarded as appropriate to possess, buy, sell, manufacture, repair or hire silencers (as a prohibited weapons dealer), yet is not suitable to be a firearms dealer who, in the course of carrying on a business manufactures, acquires, supplies, tests, repairs or converts firearms or firearm parts, and possesses firearms or firearm parts for the purpose of doing any of those things (as a firearms dealer).
The Act's overriding principle as set out in s 3 is the ensuring of public safety. In cross-examination Constable Jory agreed that, at the time of the inspection, Mr Shaw was not "a danger to the public". The Applicant maintained that his actions did "not have any criminal intent, nor did they compromise any person's safety". The Respondent said that it did not assert any criminal intent, nor was there any evidence that safety had been compromised. However, the prevention of actual instances of dangerous conduct is not the only object of the FA Act. Lee v Commissioner of Police, New South Wales Police Force [2015] NSWCATAD 254 at [199].
Mr Shaw provided extensive character references. The evidence shows him to be a man of good character and, despite his relative youth, well-respected in the local community. Because of his long career in pest management he also appears to be respected by other firearms users, notably holding the position of Chair of the Australian Professional Vertebrate Pest Controllers Association. Many of the referees wrote of his integrity and of his belief system of "doing the right thing", and his having a "high moral compass". There was no evidence of association with undesirable elements.
The objects of the FA Act are set out in s 3; the Act's overriding principle of ensuring of public safety outweighs that individual's claim to possess and use a firearm: Hill v Commissioner of Police, New South Wales Police Service [2002] NSWADT 218, [24]; Huckel v Commissioner of Police, New South Wales Police Force [2008] NSWADT 347. Mr Shaw in his evidence and submissions stressed the commercial advantage that gaining a firearms dealer licence would bring, noting "the company … is the sole income supplier to our family and that the provision of this licence is a key requirement for our companies (sic) conduct". However, when considering whether to issue a FD licence, the financial concerns of an applicant are not to outweigh the public interest: Pennington v Commissioner of Police, New South Wales Police [2004] NSWADT 44 at [57]. Having said that though, from the information on the PWD Permit, the company has 4 employees, and, it may be inferred that, at least to some extent, they and their families, obtain some benefit from the company's operations; in his submission Mr Shaw mentioned that his business brought work to the area.
Section s 3(2)(d) specify that the strict compliance with registration and licensing requirements must be satisfied. Furthermore, the Tribunal has recognised that a person with a high level of interest and experience in firearms, such as Mr Shaw should keep pace with the legislative obligations: O'Connell v Commissioner of Police, New South Wales Police Force [2009] NSWADT 162 at [25]. The Respondent submitted that the multiple breaches of the FA Act, Regulation and WP Act would satisfy the Tribunal that the issuing of a firearms dealer licence to the Applicant would be contrary to the public interest.
Mr Shaw was quizzed in cross-examination about various aspects of the processes with respect to categories of weapons, licensing, purchase and storage of firearms. Some of his answers demonstrated a level of detail that was unchallenged as to accuracy. The Respondent submitted that it is clear from Mr Shaw's evidence and submissions in relation to the various breaches, that Mr Shaw still does not understand or appreciate the strict obligations required of those who have a licence to possess firearms and prohibited weapons, let alone the additional obligations that apply to firearms dealers. I do not agree with this submission. Mr Shaw, it seemed to me, was not attempting in his evidence to provide any obfuscation as to what he had done. He explained the reasons for his oversights and I found his explanations to be plausible and consistent with his genuine belief as to the necessary course to be taken. It was unfortunate that sometimes his course of conduct was in error. He regarded some of the transgressions to have been "technical", and to some extent, this is an accurate description of the errors. Having said that, the firearms legislative scheme is, by necessity, a technical one, sometimes, it seems, to the point of impenetrability.
It is well established that in considering an application for review a Tribunal is not restricted to a consideration of the material that was before the decision-maker, but may have regard to any relevant material before it at the time of the review: Shi v Migration Agents Registration Authority [2008] HCA 31.
In his statement Senior Constable Hayden, the licensing officer, expressed the view that the Applicant may be granted a FD licence in the future, but only after a period of time has elapsed during which consistent compliance with licence and permit obligations under the FA Act, Regulation and WP Act can be satisfied. That view was repeated in the original decision and in the decision under review.
Further, the Respondent submitted that the company had not undertaken an adequate number of self-initiated audits with Police in accordance with Mr Shaw's undertaking and consequently I should not be satisfied that the higher standard required of firearm dealers is capable of being satisfied by the Applicant. Mr Shaw gave unchallenged evidence that he had tried to initiate an audit in about October or November 2017 by contacting Senior Constable Hayden. However he was told that Senior Constable Hayden was too busy and to leave it 'till the new year. I note however that on 12 April 2018 licensing officers from Nowra Local Area Command undertook an audit of the Applicant's business and recorded compliance under the WP Act and FA Act. That suggests to me that, at least by that time, he was aware of his and the company's obligations. I do not understand another subsequent audit to have been undertaken either at Mr Shaw's instigation or by licensing police; neither was it clear that Senior Constable Hayden had been replaced as the relevant licensing officer at Nowra.
Mr Shaw said, and I accept, that the inspection and the consequent adjustment to his work practices was "a major wake up", and he now scrupulously checks requirements before he does anything. This is consistent with him not having adversely come to attention through inspections since that time. On the evidence before me I am satisfied that Mr Shaw, and through him, the company, has sufficient knowledge of the legislative requirements in regard to the possession, storage and safety of firearms to allow that public to be comfortable with his holding a licence.

[18]

Scope of the company's proposed activities

On 25 June 2018, Mr Shaw provided the Respondent and the Tribunal with an outline of proposed activities for the company's FD licence. He wrote as follows: PROPOSED ACTIVITIES FOR THE DEALERS LICENCE:

Acquire firearms within the categories of the Dealer's licence for testing. development and sale of firearm suppressors. Firearms are to be disposed of through lawful means when no longer required.
Receive and return customer firearms for the purposes of fitting and manufacturing firearm suppressors
Register and transfer firearms
Receive and return customer firearms for the purposes of repairing.
Threading, chambering, modifying, finishing (Cerakote, Blueing. etc) and other work associated with the practices of a licenced gunsmith. ACTIVITIES SPECIFICALLY EXCLUDED:
Display of firearms, firearm parts. accessories. ammunition and other associated products at the Company premises
On site sales of firearms. ammunition or ammunition components
Promotion of locality for the Dealer's Licence
Sell firearms on consignment

The Respondent submitted that the activities proposed by Mr Shaw go beyond what was previously proposed by him in the Business Case dated 21 June 2017 supplied by the company to the Registry and included additional activities, such as the registration and transfer of firearms, that are not necessary for the conduct of his business. It contended, for example, that whilst the "on-site sales of firearms, ammunition or ammunition components" is noted under "Activities specifically excluded", the Respondent speculated that it may be possible for the company to conduct the sale of firearms over the phone, via email, website, social media, media outlets or otherwise in person. It also noted that there is no definition of "gunsmith".
It also referred to Mr Shaw having given evidence at the first hearing that he would only seek to acquire "up to a dozen" firearms for research and development purposes. I find nothing in this statement to be inconsistent with the proposal.
The Respondent submitted that, in light of the inconsistencies in the proposal, as well as the breaches that it is not in the public interest for the Applicant to be issued with a FD licence.

[20]

Genuine reasons for having a licence: s 12 of the FA Act

Under s 12(1) of the FA Act, the Commissioner must not issue a licence that authorises the possession and use of a firearm unless the Commissioner is satisfied that the applicant has a genuine reason for possessing or using the firearm. The Table to s 12 prescribes that, in order to establish the genuine reason of Business or Employment, an applicant must demonstrate that it is necessary in the conduct of its business or employment to possess or use the firearm for which the licence is sought.
Relevantly, in the FD First Time Application Checklist submitted by the Applicant seeks authorisation of a number of prohibited firearms listed in Schedule 1 under the FA Act, including items (1), (2), (3), (4), (5), (6), (7), (9), (10), (11), (13), (16).
Item 10 under Schedule 1 of the FA Act refers to "any firearm to which there is attached any article or device capable of muffling, reducing or stopping the noise created by firing the firearm". Based on the information provided by the Applicant, the Respondent conceded that Mr Shaw had a genuine reason for possessing or using such prohibited firearms in the conduct of its business, noting that he already holds a PWD Permit.
The Respondent submitted, however, that the company did not offer any clear reason as to why it would need to possess or use any of the other prohibited firearms identified on the application form. Rather, the same response has been repeated in relation to each category of prohibited firearm and offers the general justification that: To be able to develop, refine, review, modify, repair, test, evaluate and ensure safe and effective operations of our products we need the capacity to test them on the firearms, including where required taking possession of customer firearms for repairs, maintenance, alteration, fitting and so on.
The Respondent submitted that the Applicant has not provided any clear justification or supporting evidence to demonstrate that it is necessary in the conduct of its business or employment to possess or use each of the prohibited firearms for which the firearm dealers licence is sought.
In the Internal Review the delegate considered that the Applicant had not provided adequate supporting documentation to evidence the need to trade in any of the prohibited firearms selected, including the reasons why it required each prohibited firearm type. One piece of missing evidence, it was said, was contracts or letters from potential customers. However, having regard to the limited ability to advertise, that is hardly surprising.
Mr Shaw said in cross examination that his current customers are recreational hunters, firearms dealers, and contract shooters and primary producers for vermin control. He hopes to be able to offer his products to the Department of Defence and, ultimately, to the overseas defence market. The Respondent was critical of the Applicant not providing any evidence of contacts with Defence procurement officers, but as Mr Shaw pointed out, he is not able to solicit work while not licensed.
Similarly, Mr Shaw referred to the conundrum of needing a licence to gain work, and without the work, cannot substantiate an ongoing need for at least one category of firearms.

Shawmac Industries Australia Pty Ltd v Commissioner of Police, NSW Police Force

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