Nguyen v Director General, Department of Fair Trading [2002] NSWADT 13 (5 February 2002)

Last Updated: 16 May 2002

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL GENERAL DIVISION

CITATION: Nguyen -v- Director General, Department of Fair Trading [2002] NSWADT 13

PARTIES: APPLICANT

Van Tu Nguyen

RESPONDENT

Director General, Department of Fair Trading

FILE NUMBERS: 013320

HEARING DATES: 29/01/2002

SUBMISSIONS CLOSED: 29/01/2002

DECISION DATE: 05/02/2002

BEFORE: Hennessy N (Deputy President)

LEGISLATION CITED: Pawnbrokers and Second-hand Dealers Act 1996

Pawnbrokers and Second-hand Dealers Regulation 1997

CASES CITED: Altavilla -v- Director General, Department of Fair Trading [2000] NSWADT 110

Tran -v- Director General, Department of Fair Trading [2002] NSWADT 9

APPLICATION: Pawnbrokers & Second-Hand Dealers Act - pawnbrokers licence - revocation or suspension of licence

Pawnbrokers licence - revocation or suspension of licence

MATTER FOR DECISION: Principal matter

APPLICANT REPRESENTATIVE: APPLICANT

In person

RESPONDENT REPRESENTATIVE: RESPONDENT

J Coss, solicitor

ORDERS: The Director General's decision to revoke Mr Nguyen's licence under the Pawnbrokers and Second-hand Dealers Act 1996 is set aside.

Reasons for Decision:

Introduction

1 On 21 December 2001, a delegate of the Director General of the Department of Fair Trading (Director General) revoked Mr Nguyen's licence under the Pawnbrokers and Second-hand Dealers Act 1996 (the Act). The Director General also specified that Mr Nguyen could not be granted a licence for a period of 3 years.

2 The two grounds for the Director General's decision were that:

Mr Nguyen had been convicted of offences under the Act; (See s 34(1)(c) of the Act) and

Mr Nguyen had incurred in excess of 12 demerit points as defined in the Act within a period of 3 years; (See s 34(1)(g) of the Act)

Relevant legislation

3 Under the Act anyone carrying on the business of a pawnbroker or second hand dealer must be licensed. The then Minister for Fair Trading, Ms Lo Po', said in the Second Reading Speech introducing the Bill, at p 440 that:

The Government is intent on enhancing the capacity of the Police Service to target thieves and those who trade with them and of the Department of Fair Trading to remove dishonest traders from the marketplace.

4 Demerit points scheme. Section 27 of the Act provides for a demerit points scheme. Conviction for certain offences attracts demerit points. Under section 27(3) and section 34 of the Act, the Director General may issue a Notice to Show Cause why a licence should not be revoked if, among other things, a licensee incurs a total of 12 or more demerit points within any 3 year period.

5 Notice to Show Cause. The provisions relied on by the Director General in the Notice to Show Cause were s 34(1)(c) and s 34(1)(g). These provisions are set out below:

(1) The Director-General may serve a notice on any licensee:

(c) who, or one of whose employees, has been convicted of an offence involving dishonesty in relation to the licensed business or of an offence against this Act, or

(g) who has incurred a number of demerit points as referred to in section 27 (3), or

requiring the licensee to show cause, within a time (not less than 14 days) limited by the notice, why the licensee's licence should not be revoked.

6 If, after considering any response to the Notice to Show Cause, the Director General is satisfied that the grounds in the Notice have been substantiated, he may revoke the licence or make certain other decisions. The relevant parts of s 36 of the Act state that:

(1) The Director-General may undertake such inquiry and investigation in relation to the matters to which a notice under section 34 relates, and any submissions made and evidence adduced by or on behalf of the licensee in elation to those matters, as the Director-General thinks fit. If, after such inquiry and investigation, the Director-General is satisfied on the balance of probabilities that the ground of any notice under section 34 has been substantiated against the licensee, the Director-General may:

(a) revoke the licence, or suspend it for such portion of the remainder of its duration as the Director-General thinks fit, or

(b) attach one or more conditions to it, or

(c) determine that the licence is not to be renewed, or that a licence is not to be granted to the same licensee in future, unless one or more conditions are attached to it on grant or renewal.

(2) Without limiting the generality of subsection (1) (b), the Director-General may specify, as a condition to be imposed in accordance with that paragraph in respect of the licence of a corporate licensee, that a particular director or officer of the corporation must not (either for a specified period or permanently, as the Director-General may determine) be concerned in the management of the licensed business.

(3) The Director-General, on revoking a licence, may specify a period during which the licensee cannot be granted a further licence, and such a specification precludes the grant of a licence during that period.

(4) The Director-General, on revoking or suspending a licence, may, where the licensed business consisted of or included pawnbroking, make such order as the Director-General thinks fit in relation to the redemption of goods held in the course of that business.

7 Provisions breached by Mr Nguyen. Mr Nguyen breached several provisions of the Act including s 28(2)(a), s 29(5) and s 14(1). Section 28(2)(a) provides that a record must include "a fair and reasonable description of the goods, including any serial number or other identifying number and any hallmark, inscription or engraving appearing on the goods." Section 29(5) of the Act provides that a pawnbroker must not sell any goods before the redemption period has expired. Under s 29(1) the redemption period for pawned goods is 3 months. Section 14(1) of the Act and Clause 12(2) of the Pawnbrokers and Second-hand Dealers Regulation 1997 (the Regulations) provides that a licensee must display the licence in the manner prescribed by the Regulation in letters at least 5 cm high.

Evidence

8 The evidence consisted of a copy of the department's file, two infringement notices with which Mr Nguyen was issued and a Phillips remote control for a television.

9 Mr Nguyen was issued with a three year licence under the Act on 22 March 1999. Later that year a departmental officer attended Mr Nguyen's premises and issued two infringement notices for breaches of the Act. Infringement Notices are generally issued in relation to first time offences and/or circumstances where there are relatively few offences. For subsequent offences, or multiple offences, action is generally taken by way of prosecution in the Local Court.

10 The offences for which Mr Nguyen received infringement notices, and a brief description of the party's submissions in relation to each of them, are set out below.

11 Selling goods before the exemption period expired contrary to s 29(5) of the Act. The redemption period for pawned goods is 3 months under s 29(1) of the Act. Mr Nguyen admitted that he sold the goods one week before the statutory redemption period because the pledgor had asked him to sell the goods. Mr Nguyen says he does not have a record of the request to sell the goods. Mr Nguyen admits that he was in breach of the Act in relation to this offence.

12 Failure to record reasonable description of pledge. The goods were a mobile phone and battery charger. The serial numbers for the phone and the charger were not recorded.

13 Mr Nguyen was fined for these offences and has paid those fines. On 7 November 2000 an investigation officer from the department attended Mr Nguyen's premises. Mr Nguyen received 7 summons for breaches of the Act following these visits. He pleaded guilty to these offences and was fined a total of $5,500.00. The offences for which Mr Nguyen was convicted and a short summary of the party's submissions in relation to each offence, is set out below:

14 Licence particulars not displayed. Section 14(1) of the Act and Clause 12(2) of the Pawnbrokers and Second-hand dealers Regulation 1997 (the Regulations) provides that a licensee must display the licence in the manner prescribed by the Regulation in letters at least 5 cm high. Mr Nguyen said that he did not display his name because he was concerned that people may be able to find his address in the phone book. He made no submission about the height of the letters. He said he displayed all the other details required under the legislation.

15 Matters relating to mobile phones and a drill. Section 28 of the Act requires a licensee to record a fair and reasonable description of the goods. Mr Nguyen failed to record the serial number of a Nokia mobile phone battery, and failed to record the battery at all of another Nokia phone. In relation to another phone, he failed to record two batteries, one leather case and an additional charger. Mr Nguyen said that the infringement notice he received previously only related to the phone and the charger. No-one told him that he had to record the serial number of the battery as well. He was also convicted of failing to record an inscription on a Hilti drill. The words "Harvey, Harveys HAC and 00238947" were engraved on the drill. Mr Nguyen said he recorded all the relevant details and did not know he had to record inscriptions as well. Furthermore there was no field on the computer program for recording inscriptions of this kind.

16 In response to these matters, the Director General said that the non-recording of batteries was not the only manner in which Mr Nguyen had breached the Act. In one case a charger and a leather case had not been recorded.

17 Matters relating to description of remote controls. The final matters in relation to recording pledges involved two remote controls, one for a VCR and the other for a DVD. Mr Nguyen still had the remote control for the VCR. He gave evidence that he recorded a number on the front of the remote control - q0813 as the serial number. On closer inspection he agreed that the "q" was actually "G". He said that the number 231M was printed on a square white sticker and that he did not record that number because he did not believe it to be the serial number. Mr Nguyen also said that the sticker could be easily removed, so it was not a satisfactory way of identifying the goods. The statement from the investigator, Mr Hancock, dated 24 January 2001, states that "I could not identify the serial number q0813, but located serial number 231M instead." Mr Hancock was not available to give evidence because he was attending a funeral. I am not sure if Mr Hancock was saying that he could not identify serial number q 0813 because that number was not a serial number, because it was incorrectly recorded as "q" instead of "G" or because he failed to see the number at all. The number G0813 was clearly visible on the front of the remote control. In any event, there is now no sticker on the back of the remote control.

18 Mr Sebastian Mignacca, a senior investigator with the Department, gave evidence that it was common for serial numbers to be recorded on stickers because unique numbers could not be attached to goods as part of the manufacturing process. The number Mr Nguyen wrote as the serial number was probably the model number. Serial numbers had to be separately assigned and this was generally done by applying a sticker. The second infringement relating to a remote control was similar.

19 Not assigning a unique contract number for each transaction. Under Clause 14(1)(b) of the Regulation a contract number must be allocated for each transaction. Because the pledgor had also pledged an IMAX computer, the receipt had the same transaction number as for a mobile phone. Mr Nguyen says that he did not know how to generate a new contract number on the computer in this situation, but he now knows how to do so.

20 Mr Nguyen has a total of 17 demerit points under the Act as a result of the infringement notices and the convictions. On 30 July 2001, the Director General issued Mr Nguyen with a Notice to Show Cause why his licence should not be revoked. On 21 December 2001 Mr Nguyen received advice from the Director General that his licence had been revoked and that he could not be granted a licence for three years.

Applicant's submissions

21 Mr Nguyen submitted that he had done his best to comply with the requirements of the legislation. He did not receive sufficient information about what he had to do to comply with the legislation and just did the best he could. He said that he is scared of the inspectors and he does not want to spend a great deal of money on fines for what he says are minor mistakes. He believes that $800 for each of the summons is an excessive penalty and he does not want to risk losing that much money again because of innocent mistakes. His intention is to sell his business because he does not want to risk more fines but in the meantime he wants the decision to cancel his licence for three years to be reviewed.

Respondent's submissions

22 Mr Coss, on behalf of the Director General, submitted that it was Mr Nguyen's responsibility to understand the requirements of the legislation. It was no excuse for him to say that he did not know the requirements of the Act because he was issued with a publication entitled "Pawnbrokers/Second-hand Dealers licensing" when he applied for the licence. That publication lists the relevant legislation and states that a licensee should buy a copy of the legislation.

Reasons and decision

23 There were very few factual matters in dispute. Without the opportunity to test Mr Hancock's evidence I am not satisfied that the numbers 231M and 231H on the two remote controls were serial numbers. However, Mr Nguyen has been convicted of not providing the correct details of the serial numbers of the remote controls. I cannot alter the fact of that conviction.

24 The discretion in s 36 of the Act is not limited by any factors set out in the legislation but must be exercised consistently with the purpose and objects of the Act. The Act has no objects clause, but based on the Act itself and the Second Reading Speech, those objects include targeting thieves and removing dishonest traders from the marketplace. In particular, the matching of descriptions of pledged goods with goods reported as being stolen, is one way of deterring people from stealing goods and from disposing of them through pawnbrokers.

25 There is no evidence that Mr Nguyen is dishonest in the sense that he intentionally misdescribed pledged goods or committed any of the other breaches of the Act. I find that the breaches of the Act were a result of his ignorance of the legislative requirements, confusion about which numbers were the serial numbers and an inability to insert certain information into the computer.

26 This Tribunal has decided two other cases of this kind. In the first case, Altavilla -v- Director General, Department of Fair Trading [2000] NSWADT 110 Mr Altavilla's offences were more numerous and occurred over a longer period of time than Mr Nguyen's. Mr Altavilla incurred 84 demerit points. The Tribunal affirmed the Director General's decision to revoke the licence and to refuse to grant Mr Altavilla a further licence for a period of three years.

27 In the second case, Tran -v- Director General, Department of Fair Trading [2002] NSWADT 9, the Tribunal affirmed the Director General's decision to revoke the licence but varied the period in which Mr Tran would be refused a further licence from three years to one year. Mr Tran had accumulated 33 demerit points, compared with Mr Nguyen's 17 points. Their offences were similar. Both gentleman had problems with the computer software. Both were ignorant of some of the requirements of describing pledged goods. Neither was dishonest.

28 In Mr Nguyen's case, although he has been convicted of a failure to record the serial number on two remote controls, I am satisfied, on the basis of his evidence, that he made every effort to record the correct details. He did not appreciate that a number on a sticker on the back of the remote controls was a serial number. Given all the evidence, this was an understandable error. He incurred four demerit points for these offences.

29 In all the circumstances of this case, I am not satisfied that the number and nature of Mr Nguyen's convictions justifies him losing his licence for three years. It is true that after the infringement notices had been issued Mr Nguyen breached the Act again in a similar respect by failing to record the serial number for a mobile phone charger. In relation to the other offences he has either openly admitted to the offences or provided convincing evidence for his failure to comply with the legislation. I appreciate that the licensing scheme depends on goods being accurately described so that stolen goods can be detected. However there must be some room for human error. When the level of error is such that it is clear that a person is not going to learn from their mistakes, then revocation of a licence may be justified to protect the public interest. That is not the case for Mr Nguyen.

30 I am concerned that a person in Mr Nguyen's position was not put on notice after the issuing of the infringement notices that further demerit points could result in the revocation of his licence. The Notice to Show Cause was unexpected. Neither Mr Nguyen nor Mr Tran was aware that the accumulation of points may trigger the exercise of the Director General's discretion to revoke their licence.

31 I recommend to the Director General that he give consideration to implementing a system whereby any person who incurs demerit points be given formal notification by the Department that incurring 12 or more demerit points could result in the revocation of their licence. While this is apparent from the legislation, in my view, it is unfair for licensees who have been operating honestly to be faced with the possibility of their licence being revoked without being on notice well before a Notice to Show Cause is issued.

Orders

The Director General's decision to revoke Mr Nguyen's licence under the Pawnbrokers and Second-hand Dealers Act 1996 is set aside.