In 2008 Ms Stuart started working as an apprentice in a Sydney tattoo parlour owned by Hells Angels motor cycle club member, Mr Sidirourgos and his then wife Jo-Ann Pomeroy. When Parliament passed laws requiring a person operating a tattoo parlour to be licenced, Mr Sidirourgos realised that he would not be given a licence because of his association with an outlaw motor cycle club. According to Ms Stuart, Mr Sidirourgos and Ms Pomeroy moved to Queensland in 2012 and gave her their business, Platinum Ink Pty Limited. In February 2013, Ms Stuart became the sole director of that company and operated that tattoo parlour at the same address in Sydney. Ms Stuart told the Tribunal that she thought that the shares in Platinum Ink Pty Limited had also been transferred to her in February 2013. In fact, Mr Sidirourgos continued to be recorded on the Australian Securities and Investments Commission (ASIC) register as being the only shareholder.
Following the introduction of the Tattoo Parlours Act 2012 (NSW), Ms Stuart applied for an operator licence in June 2013. The legislation allowed her to continue operating until notified that the application had been refused or withdrawn. The application was referred to the Commissioner of Police for assessment. On the basis of certain material, including criminal intelligence information, the Commissioner of Police determined that Mr Sidirourgos was a "close associate" of Ms Stuart, that he was not a fit and proper person and that it would be contrary to the public interest to give Ms Stuart a licence. Because of this adverse security determination, the Commissioner for Fair Trading was obliged to refuse Ms Stuart's application for a licence and did so on 19 January 2018. Ms Stuart has applied to the Tribunal for a review of that decision.
After Ms Stuart applied to the Tribunal, she saw that Mr Sidirourgos was still recorded as a shareholder of Platinum Ink Pty Limited on the ASIC register. Ms Stuart believed that was a mistake and asked her husband to contact Mr Sidirourgos as he is "friends" with him on Facebook. Ms Stuart's evidence was that Mr Sidirourgos told her husband that he would talk to his legal team and get it sorted out. There was evidence that, on 24 January 2018, the shares were transferred to Ms Stuart retrospectively, that is with effect from 21 February 2013. Ms Stuart says that apart from asking others to contact Mr Sidirourgos to transfer the shares, she has not been in contact with him since 2013.
Ms Stuart has applied to the Tribunal for the Commissioner for Fair Trading's decision refusing her application for an operator's licence to be postponed or "stayed" so that she can continue operating the business. The issue in these proceedings is whether it is desirable to allow Ms Stuart to continue operating keeping in mind both her interests and the public interest. For the reasons set out below, I have decided to allow Ms Stuart to continue operating the business until the Tribunal makes its decision.
[2]
Tribunal's powers to stay the operation of a decision
The general rule is that an application to the Tribunal for an administrative review of a decision does not prevent the decision from taking effect. But the Tribunal may make an order "staying or otherwise affecting the operation of the decision". The power is set out in s 60 of the Administrative Decisions Review Act 1997 (NSW):
(1) Subject to this section, an application to the Tribunal for an administrative review under this Act of an administratively reviewable decision does not affect the operation of the decision under review or prevent the taking of action to implement that decision.
(2) On the application of any party to proceedings for an application for an administrative review under this Act of an administratively reviewable decision, the Tribunal may make such orders staying or otherwise affecting the operation of the decision under review as it considers appropriate to secure the effectiveness of the determination of the application.
(3) The Tribunal may make an order under this section only if it considers that it is desirable to do so after taking into account:
(a) the interests of any persons who may be affected by the determination of the application, and
(b) any submission made by or on behalf of the administrator who made the decision to which the application relates, and
(c) the public interest.
Because this case involves the refusal of an application for a licence, the staying of that decision would mean that Ms Stuart still does not have a licence. However, s 60 also gives the Tribunal power to make an order "otherwise affecting the operation of the decision". In AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 at [16], Basten JA described the word "stay" as "a somewhat imprecise term which is usually understood to refer to a future event". In that case, which involved the revocation of a licence, the Court of Appeal acknowledged at [16] to [18] and [95] to [96] that while it is not possible to "stay" a revocation decision, s 60(2) is wide enough to enable the Tribunal temporarily to reinstate a licence that has been revoked.
Applying the same reasoning to this case, the Tribunal has power to make an order which has the effect of temporarily granting an operator's licence. The Tribunal must firstly be satisfied that a decision to temporarily grant an operator's licence is "appropriate to secure the effectiveness of the determination of the application": Williamson v Director General, Department of Transport [2000] NSWADT 165 at [12]. The Tribunal must then consider whether it is desirable to grant an operator's licence taking into account the interests of any person affected by the determination, any submissions made by the administrator who made the decision and the public interest.
[3]
Securing the effectiveness of the determination
In Williamson v Director General, Department of Transport [2000] NSWADT 165 the Administrative Decisions Tribunal gave examples of cases where the Administrative Appeals Tribunal had interpreted that phrase in the equivalent Commonwealth provision, s 41 of the Administrative Appeals Tribunal Act 1975 (Cth). In those decisions, the AAT held that the phrase means that without a stay:
(1) the hearing will not be fully effective: Australian (NDT) Services Pty Ltd and Civil Aviation Safety Authority [1999] AATA 79 at [13];
(2) the hearing will be "jeopardised" or "rendered nugatory": Re Repatriation Commission and Delkou [1985] AATA 297; (1985) 8 ALD 454 at [8];
(3) the applicant will suffer serious irreparable harm, in the sense that no recompense for it can be obtained if the application for review is successful: Re Pelling and Secretary, Department of Aviation [1984] AATA 179; (1984) 5 ALD 638 at 639.
The Court of Appeal explained the threshold test as applying to circumstances where there is no "practical point" in reviewing the decision if a stay is not granted or the applicant will be deprived temporarily of the benefit of a favourable decision:
There is an express statutory power for the Tribunal to grant or refuse a stay or other order "as it considers appropriate to secure the effectiveness of the determination of the application". In other words, the purpose of granting a stay or other order is connected with the determination of the application. "[S]ecur[ing] the effectiveness of the determination of the application" involves matters such as ensuring that the lapse of time before the determination is actually made does not deprive the review of practical point. It also involves considering the possibility that the result of the review might be that the decision is affirmed, with the consequence that if a s 60(2) order is granted the decision that the review ultimately decides was correct has not been implemented during the period of the s 60(2) order: AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81 at [129] (Campbell JA, Handley JA agreeing)
Ms Stuart's evidence was that she is paying rent for the premises where the tattoo parlour is operating and that she has to pay public liability insurance. She has two other tattoo artists working in the business and she has no independent savings.
I am satisfied that Ms Stuart will suffer irreparable harm if she is not given an operator's licence pending the determination of the matter by the Tribunal. If she is ultimately given a licence, she will not be entitled to any compensation for the financial loss she will suffer.
[4]
Ms Stuart's interests and the public interest
There is no dispute that it is in Ms Stuart's financial interests that she be permitted to continue to operate the business.
There is a strong public interest in ensuring that tattoo parlours are free from any influence by members of outlaw motor cycle gangs. In his second reading speech on the introduction of the Tattoo Parlours Bill 2012 to Parliament, the Minister for Police and Emergency Services, Mr Gallacher, noted that the legislation was introduced in response to gang crime in New South Wales. One aim was to remove bikies from the tattoo industry, thereby reducing the incidence of turf wars and serious acts of violence such as shootings and fire-bombings. Removing bikies would also eliminate a means for organised criminals to launder money: New South Wales Legislative Council, Parliamentary Debates (Hansard), (23 May 2012) at page 34.
The evidence given at the hearing included confidential evidence from the Commissioner of Police. While I have taken that evidence into account, I do not need to make any factual findings about that evidence in these proceedings.
According to Ms Pomeroy, Mr Sidirourgos was a member of Hells Angels, at least until they separated in May 2013. A report in the Courier Mail newspaper on 1 May 2012 suggested that Mr Sidirourgos had been operating a de facto Brisbane city chapter of the Hells Angels despite living on the Gold Coast. It was not in dispute that Mr Sidirourgos is a member of an outlaw motor cycle gang.
Ms Pomeroy was the initial director, secretary and shareholder of Platinum Ink Pty Limited but Mr Sidirourgos became the sole director in February 2010 and the sole shareholder in May 2010. The evidence currently available is that it was always Mr Sidirourgos' and Ms Pomeroy's intention to transfer Mr Sidirourgos' shares to Ms Stuart in 2013 and it was her understanding that that had been done. Ms Pomeroy also recalls that she directed her accountants to transfer all the shares to Ms Stuart. Mr Papaklonaris from MKP Associates gave evidence that the failure to do so was an "inadvertent oversight". As these proceedings were heard urgently, the Department did not require Mr Papaklonaris for cross-examination.
Ms Stuart, Ms Pomeroy and Mr Papaklonaris all gave consistent evidence that the intention in February 2013 was to substitute Ms Stuart as the sole director and to transfer the shares to her. Mr Sidirourgos did not give evidence but he has apparently transferred the shares to Ms Stuart retrospectively. (Emphasis added.)
All the evidence on this issue is plausible, consistent and not contradicted. I find, for the purpose of these proceedings, that Mr Sidirourgos intended to transfer his shares into Ms Stuart's name in February 2013 but that through an inadvertent oversight on the part of the accountants, that did not happen. Since then it appears that the shares have been transferred into Ms Stuart's name. While the validity of that transfer has not been independently verified, the Commissioner of Police conceded that, on its face, there has been a valid transfer.
On 21 July 2017, MKP Associates ceased to be Ms Stuart's accountant. Ms Stuart said that Ms Pomeroy arranged for new accountants to be appointed. The new accountants, CHG Integrated Wealth, are based in Coolangatta which is on Queensland's Gold Coast.
A "close associate" of an applicant is defined in s 4 of the Tattoo Parlours Act. The part of that definition that is relevant to these proceedings is s 4(1)(a):
(1) For the purposes of this Act, a person is a "close associate" of an applicant for a licence or a licensee if the person:
(a) holds or will hold any relevant financial interest, or is or will be entitled to exercise any relevant power (whether in the person's own right or on behalf of any other person), in the business of the applicant or licensee that is or will be carried on under the authority of the licence, and by virtue of that interest or power is or will be able (in the opinion of the Commissioner) to exercise a significant influence over or with respect to the management or operation of that business, or
Consequently, to be a "close associate" Mr Sidirourgos must firstly hold either a financial interest or be entitled to exercise a relevant power in the business. A financial interest includes "any share in the capital of the business:" Tattoo Parlours Act, s 4. A relevant power is defined in s 4 to mean:
… any power, whether exercisable by voting or otherwise and whether exercisable alone or in association with others:
(a) to participate in any directorial, managerial or executive decision, or
(b) to elect or appoint any person to any relevant position.
Secondly, by virtue of that interest or power, Mr Sidirourgos must be able to exercise "significant influence" over the management or operation of the business.
Until 24 January 2018, Mr Sidirourgos had a financial interest because he was the only shareholder of Platinum Ink Pty Limited. The ASIC records show that he no longer has that financial interest because the shares have been transferred to Ms Stuart.
The Commissioner of Police did not identify a "relevant power" held by Mr Sidirourgos as defined in s 4. There was some evidence about the appointment of accountants and changes to registered offices, but even if Mr Sidirourgos had some involvement in those changes, it would not make him a "close associate" of Ms Stuart. Nor was there any evidence that, by virtue of such a power, Mr Sidirourgos could exercise "significant influence" over the management or operation of the business.
I am not satisfied, on the evidence currently before me, that Mr Sidirourgos is a "close associate" of Ms Stuart. Nor is there sufficient evidence of Mr Sidirourgos influencing or being involved in the operation of the business to justify denying her a licence while NCAT determines her application. I am satisfied that it is desirable to grant Ms Stuart an operator's licence temporarily taking into account her interests, the submissions by the Commissioner of Police and the public interest.
[5]
Orders
For the reasons I have given, I make the following order;
The operation of the decision on 19 January 2018 to refuse to grant the applicant a licence is stayed and the applicant is granted a temporary operator's licence under the Tattoo Parlours Act 2012 (NSW) pending the determination of these proceedings.
[6]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 14 February 2018