Welby Pty Ltd v Commissioner for Fair Trading [2003] NSWADT 249 (24 November 2003)

Last Updated: 2 December 2003

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL GENERAL DIVISION

CITATION: Welby Pty Ltd v Commissioner for Fair Trading [2003] NSWADT 249

PARTIES: APPLICANT

Welby Pty Ltd

RESPONDENT

Commissioner for Fair Trading

FILE NUMBERS: 033130

HEARING DATES: 29/10/03

SUBMISSIONS CLOSED: 29/10/2003

DECISION DATE: 24/11/2003

BEFORE: Montgomery S - Judicial Member

LEGISLATION CITED: Administrative Decisions Tribunal Act 1997

Crimes Act 1900

Travel Agents Act 1986

Travel Agents Regulation 2001

CASES CITED:

APPLICATION: Travel Agent - grant of licence

Travel Agents Act - Travel Agent - grant of licence

MATTER FOR DECISION: Principal matter

APPLICANT REPRESENTATIVE: APPLICANT

A Rogers, counsel

RESPONDENT REPRESENTATIVE: RESPONDENT

K Bozinovska, solicitor

ORDERS: 1 The decision of the Commissioner for Fair Trading to refuse the application by Welby Pty Limited for a licence under the Travel Agents Act 1986 is set aside

2 The matter is remitted for reconsideration by the Commissioner for Fair Trading with the recommendation that Welby Pty Limited be granted the licence sought if it satisfies the compensation scheme requirements provided for in section 10 of the Travel Agents Act 1986

Reasons for Decision:

The Application

1 This is an application for review of a decision by the Commissioner for Fair Trading ("the Commissioner") to refuse an application by Welby Pty Limited ("the Applicant") for a licence under the Travel Agents Act 1986 ("the Act").

2 By letter dated 12 May 2003, the Commissioner advised the Applicant that he had refused the application. The Application was refused on the grounds that the Applicant's Director, Mr. Mathew Goodall, is not of good reputation or character or would not be a fit and proper person to hold the licence. By letter dated 20 May 2003, the Applicant applied for an internal review of the Commissioner's Decision. The original decision was affirmed following the internal review. The Commissioner advised the Applicant of that outcome by letter dated 30 May 2003.

Background

3 The Office of Fair Trading ("OFT") application form completed on behalf of the Applicant ("the licence application form") contains a number of questions relevant to a licence applicant. On page 9 of the application form under the heading "PART O HISTORY", the form states in bold print "The Department of Fair Trading will conduct a criminal record check in respect of the Individual Applicant, all Directors of a Corporation, all Partners and all Managers". A question numbered "F" within Part O of the form ("Question F") sought information with respect to whether the Applicant, any of its directors, Managers or Partners had "been convicted for any offence involving fraud or dishonesty or served a term of imprisonment in the last 10 years." The part of the form that provided for the Applicant's answer to Question F was ticked in the box marked "No". Mr. Goodall signed the Applicant's application form.

4 A criminal check conducted by the OFT showed that:

(a) on 4 May 1994 Mr. Goodall appeared in the Port Macquarie Local Court and was convicted of stealing property. In respect of this offence, Mr. Goodall was fined $150 and ordered to pay court costs of $46; and

(b) on 7 December 2001, Mr. Goodall appeared in the Ballina Local Court and was convicted of failing to undergo breath analysis. In respect of this offence, Mr. Goodall was fined $800, ordered to pay court costs of $60 and disqualified from holding a licence for 12 months.

5 On 25 February 2003, the OFT sought an explanation concerning the stealing charges from Mr. Goodall. By a letter dated 25 February 2003, Mr. Goodall advised that on 15 April 1994 he had driven off from a service station without paying for $40 worth of fuel because a passenger in his vehicle had pulled a knife out and stuck it to his neck and yelled at him in an aggressive tone to drive off.

Reviewable decision

6 The reviewable decision is that of the Commissioner to refuse the Applicant's licence application. On 12 July 2000, Mr. Goodall filed an application with this Tribunal for Review of the Commissioner's Decision. The Application was subsequently amended to show Welby Pty Limited as the Applicant. The matter was listed for direction on 24 June 2003 at which time the matter was listed for hearing on 20 August 2003. The Hearing did not proceed and it was subsequently relisted for hearing on 29 October 2003. The matter proceeded on that day.

Applicable Legislation

7 The Commissioner's decision was taken pursuant to section 10 of the Act. The functions of the Commissioner were formerly undertaken by the Director-General of the Department of Fair Trading. Any reference to the Director-General in the applicable legislation is to be read as a reference to the Commissioner. Section 10 of the Act relevantly provides:

"10 Grant or refusal of licence

(1) Subject to this section, the Director-General shall grant an application for a licence if the Director-General is satisfied that the applicant is a participant in the compensation scheme or that the granting of the application results in the applicant being a participant in the compensation scheme.

(4) An application for a licence made by a body corporate shall be refused if it appears to the Director-General that:

(a) a person concerned in the management of the body corporate has not attained the age of 18 years,

(b) the body corporate is disqualified from holding a licence under this Act or a corresponding Act,

(c) the body corporate is disqualified under this Act or a corresponding Act from being involved in the direction, management or control of a business as travel agent,

(d) a person proposed to be employed for the purposes of section 36 (supervision of conduct of business) is not of good reputation or character or in any other way would not be a fit and proper person to be a licensee if the person were to apply for a licence,

(e) the body corporate is not likely to carry on such a business honestly and fairly,

(f) the reputation of the body corporate is such that it would not be a fit and proper person to be a licensee,

(g) an officer of the body corporate is disqualified from being involved in the direction, management or conduct of the business of a travel agent,

(h) a director of, or a person concerned in the management of, the body corporate is not of good reputation or character or in any other way would not be a fit and proper person to be a licensee if the director or person were to apply for the licence personally, or

(i) any person (other than an officer of the body corporate) who, in the opinion of the Director-General, appears to have control, or substantial control, of the body corporate is not of good reputation and character or is not likely to exercise that control honestly and fairly.

(5) Without affecting the generality of subsection (4) (f), (h) or (i), the Director-General may, in determining any matter referred to in those paragraphs, have regard (if such be the case) to the fact that a body corporate or person so referred to:

(a) has, during the period of 10 years that last preceded the making of the application, been convicted of, or served any part of a term of imprisonment for, an offence in New South Wales or elsewhere involving fraud or dishonesty,

(b) was, at the time of the making of the application, bound in relation to such an offence by a recognizance,

(c) was, at the time of the making of the application, the subject of a charge pending in relation to such an offence,

(d) has, at any time, been convicted of an offence against this Act or any other enactment administered by the Minister,

(e) has been refused a licence under a corresponding Act, or

(f) has been the subject of action that, under a corresponding Act, had an effect similar to the effect under this Act of action under section 21 (1) (a), (b), (c), (d) or (g)."

8 The Applicant's right to review of the Commissioner's decision is pursuant to section 22 of the Act. In so far as it is relevant to these proceedings, section 22 of the Act provides:

"22 Rights of review by the Tribunal

(1) If the Director-General refuses to grant an application for a licence or imposes conditions or restrictions to which a licence is to be subject, the applicant or licensee may apply to the Tribunal for a review of the decision of the Director-General."

9 The Tribunal's powers are conferred by s 63 of the Administrative Decisions Tribunal Act 1997 ("the Tribunal Act"), which provides:

"63. Determination of review by Tribunal

(1) In determining an application for a review of a 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 enactment on the administrator who made the decision.

(3) In determining an application for the review of a reviewable decision, the Tribunal may decide:

(a) to affirm the reviewable decision, or

(b) to vary the reviewable decision, or

(c) to set aside the reviewable decision and make a decision in substitution for the reviewable decision it set aside, or

(d) to set aside the reviewable decision and remit the matter for reconsideration by the administrator in accordance with any directions or recommendations of the Tribunal."

10 By virtue of section 8 of the Tribunal Act, `[a] "reviewable decision" is a decision of an administrator that the Tribunal has jurisdiction under an enactment to review.' Section 22 of the Act provides the Tribunal with this jurisdiction.

The Commissioner's case

11 In essence, the Commissioner's case is that the Applicant's Director is not of good reputation or character and not a fit and proper person to hold a travel agent's licence. The Commissioner relies on the record of Mr. Goodall's conviction for stealing property recorded on 4 May 1994 and his failure to declare that conviction as reason for refusing the application. Ms. Bozinovska provided written submissions that clearly outline the Commissioner's case. Those submissions are referred to below.

12 Ms. Bozinovska put in evidence a letter from Ms. Kaye Barnes, one of the former owners of the Port Macquarie Shell service station where the stealing property incident occurred. This letter states that neither Ms. Barnes nor her husband recall Mr. Goodall ever making payment for the stolen fuel.

13 Mr. Goodall was subjected to cross-examination by Ms. Bozinovska. Under cross-examination he conceded several matters. He conceded that he had lied to Police in relation to the events that lead to his conviction for stealing. He also conceded that when he signed the licence application form on behalf of the Applicant he was aware that he had concealed his conviction. He stated that he thought it would slow down the granting of the licence if he had declared his conviction.

14 The Commissioner argues that this most recent conduct by Mr. Goodall is positive evidence that he has not reformed and shows that he lacks the necessary degree of integrity expected of a person of good character.

The Applicants' case

15 Mr. Goodall appeared and gave evidence on behalf of the Applicant. He gave evidence in relation to the events of 15 April 1994 that lead to his conviction for stealing. His evidence is that prior to the incident he had been surfing with several friends who had agreed to share the cost of fuel. He had driven to a service station to obtain fuel and it was intended that he and each of the passengers in the vehicle would contribute $10 towards the fuel cost. Mr. Goodall said that one of the passengers refused to contribute and insisted that Mr. Goodall drive off without paying for the fuel. In his panic Mr. Goodall filled the car with diesel instead of petrol. That passenger threatened Mr. Goodall with a knife and ordered him to drive off. Mr. Goodall said that the passenger who threatened him had a reputation for violence and Mr. Goodall was frightened of him. He was scared and drove off without paying as ordered. The Police were called in relation to the incident.

16 Mr. Goodall said that the car stopped because it had been filled with diesel and not petrol and the passengers all ran away when the Police arrived. Police questioned him and he was alone and frightened. He sought advice from the Police officer who attended and took the officer's advice with respect to what he should say in his statement. In his statement to the Police, Mr. Goodall stated that he had lost his wallet and had no money to return home, he intended to tell the operator that he would send the money but got scared because he didn't have any money and drove off without paying. Mr. Goodall volunteered that the statement that he gave to Police was incorrect.

17 Mr. Goodall stated that he paid for the fuel prior to the court case by sending the service station proprietors a money order for the amount of $40.

18 Mr. Goodall said that it was part of the culture of the surfing community of which he was a member that "you did not dob on your mates!" He was also frightened of what action the passenger who had threatened him would take if he had told the Police of what had actually taken place. In the circumstances he thought it was better to take responsibility for the incident. He now accepts that he was wrong to drive off without paying for the fuel and he was wrong in not telling the truth to the Police.

19 Mr. Goodall said that his partner, Ms. Kellie McBride, completed the licence application form. He had read the form before he signed it. He was aware that the answer to Question F was ticked in the box marked "No". He was aware of his conviction but was not sure how long ago the conviction was recorded. He was also aware that he was concealing that conviction. Mr. Goodall said that he thought his matter might have been dealt with under section 556A of the Crimes Act 1900 (now repealed) with a finding that the charges were proven without proceedings to a conviction. He conceded that he took no steps to find out whether or not that was the case and that it would have been prudent to do so.

20 Mr. Goodall also said that he did not disclose his conviction because he wanted the licence for the current year's snow season and he thought it might slow down the process if he declared the conviction. He understands that he was wrong to conceal the conviction and now regrets having taken that approach.

21 Mr. Goodall stated that he was 18 years old when he was convicted of stealing. He said that he has matured considerably since that time. He is no longer a member of the surfing community with whom he had associated at that time. He said that he has been conducting his own business for over five years and has a responsible approach to his business affairs. He denied that he would repeat the type of conduct for which he was convicted and denied that he would cover up for disreputable colleagues.

22 Mr. Goodall put several testimonials in evidence. Each of those testimonials asserted that Mr. Goodall is a person of good character. Those testimonials were admitted into evidence subject to weight. The details of those testimonials are referred to below.

The Commissioner's Submissions

23 Ms. Bozinovska provided detailed written submissions, which clearly state the Commissioner's case. Those submissions provide in part:

"2.4 The OFT has refused the Application under subsections 10(4) of the [Act]. ...

3.3 The standard of proof or satisfaction required by sub-section 10(4) is stated as "appears". The term "appears" was considered by the Tribunal in Artarmon Auto Recycling Ply Ltd v Director-General, Department of Fair Trading [2000] NSWADT 141 in the context of sub-section 12(4) of the Motor Dealers Act 1974, which sub-section, is in almost identical terms as sub-section 10(4) of the [Act]. The Tribunal expressed the view that the "decision must be based on reasonable satisfaction of the relevant circumstances".

3.4 If, after considering the relevant circumstances, the Commissioner can reasonably conclude that one or more of the paragraphs set out in sub-section 10(4) apply to the Applicant or one of its officers, the Commissioner is obligated to refuse the Application.

4. Do anyone or more of the paragraphs set out in sub-section 12(4) apply to the Applicant or one of its officers?

4.1 The Commissioner has determined that paragraphs 10(4)(d) and (h) of the [Act] (set out above) apply to the Applicant based on the following considerations:

4.1.1 The criminal record of the Applicant's Director reveals a conviction involving fraud or dishonesty. The Applicant does not dispute that the conviction relates to its Director.

4.1.2 In determining whether an individual is a fit and proper person to be a holder of a licence, the Commissioner may, under sub-section 10(5) of the [Act], specifically consider the individual's past criminal record. Other relevant considerations include the fact that the convictions occurred during a period of 10 years prior to the Application and that the offence involved fraud or dishonesty (paragraph 10(5)(a) of the [Act]).

4.1.3 However, a criminal record per se does not "automatically disqualify a person from holding a ...licence" (Artarmon supra). In this case, the Commissioner must be reasonably satisfied, having regard to relevant circumstances, that the Applicant's director and/ or the person proposed to be employed in the supervision of the business under section 36 of the [Act] is not of good reputation or character or in any other way would not be a fit and proper person to hold a licence.

"Good fame and character" and fit and proper person"

4.1.4 The expression "good fame and character" and "fit and proper person" have been defined in a number of cases. The leading case of Hughes and Vale v the State of New South Wales [1955] HCA 28; (1955) 93 CLR 127 establishes that the three characteristics of "fit and proper" are honesty, knowledge and ability.

4.1.5 The phrase "good fame and character" was discussed, inter alia by Miles CJ in Clearihan v Registrar of Motor Vehicle Dealers in Australian Capital Territory (1994) 22 ACTR 25, who stated the following:

"The extensive case law of the subject goes to establish that while there is a certain overlapping of the two terms "fame" and "character", there is a distinction ... I think that most English speaking people would realise that fame is to be distinguished from character. Fame involves being known, favourably, by a large section of the public while character is directed to a more objective evaluation which might involve conflict with what the general public thinks. In a case involving a legal practitioner, R v Davis [1947] HCA 53; (1947) 75 CLR 409 at 420, Dixon J referred to the two concepts as "the reputation and the more enduring moral qualities",

4.1.6 In relation to the concept "fit and proper person", the authorities are usefully summarised by the Commercial Tribunal in Young Taek Chong v Tomazin (1994) ASC 56-283 at page 58:

"The words "fit and proper" are also wide. Character, suitability and fitness are ingredients... Integrity and trustworthiness are required:

The concept extends to any aspect of fitness of propriety that is relevant to the public interest:

Nevertheless, the question is not whether the Applicant is a fit and proper person. The question is whether the Applicant is a fit and proper person to hold the particular licence: The question of fitness is not at large but is directed to the purpose of regulatory regime: New Broadcasting Limited v Australian Broadcasting Tribunal: Treasure (1987) 73 ALR 420. Further, in this context the answer must depend upon one's conception of the minimum standards demanded or required [for the profession in question): Clyne v New South Wales Barr Association [1960] HCA 40; (1960) 104 CLR 186 at 189: See also Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97CLR 279 per Kitto J. at 298 and Law Society of New South Wales v Moulton (1981) to New South Wales Law LR 736 per Rutley JA at 750. The ultimate question is whether the applicant can be safely accredited to the public without further enquiry as a person being trusted with the sort of work which the licence entails:

4.1.7 The evaluation of fitness involves a wide discretion: isolated or passing departures from proper standards may not suffice, deliberate prolonged conduct or a course of conduct is different: New South Wales Bar Association v Evatt [1968] HCA 20; (1968) 117 CLR 177 at 183. An isolated act depending on its nature may suffice: Ziems supra per Kitto J. at 298. The impugned conduct must be placed within context and assessed against the background of the overall character of the applicant..."

4.1.8 The conviction that the Applicant sought to conceal is an offence of dishonesty ...

4.1.9 Convictions of dishonesty, as here, are relevant to the determination of a person's fitness (Sakellis v Officer-in-Charge of Police, Paddington (1968) 88 WN (pt l)(New South Wales) 541). More particularly, they are relevant to the determination of a person's fitness to hold a travel agents licence.

4.1.10 As a holder of a travel agents licence, the Applicant's responsibilities will include the receipt of money for the sale of tickets and the maintenance of a trust account. The Applicant has shown through his convictions and subsequent conduct that he cannot be entrusted with such a responsibility.

The Applicant's failure to disclose his convictions

4.1.9 The Applicant failed to disclose the Director's prior conviction in the Application.

4.1.10 Failure to disclose information which may impact negatively upon an applicant's claim for a licence in particular fields has been pivotal in determinations by courts considering the issues of "fame and character" and "fit and proper person".

4.1.11 In Re Davis [1947] HCA 53; (1947) 75 CLR 409 concerned a solicitor who had been admitted to the Bar in 1946 without disclosing a conviction in 1935 for breaking, entering and stealing. In finding against the appellant Latham CJ stated as follows:

"It was submitted that the appellant, by his good behaviour since 1934, had redeemed himself, and that it was not unreasonable for him to take the view in 1945 and 1946 that he was then a person of good fame and character. It may be that he had by that time become a person of good fame, i.e., of good reputation amongst those who then knew him. But intrinsic character is a different matter. A man may be guilty of grave wrongdoing and may subsequently become a man of good character. If the appellant had frankly disclosed to the Board and to the two solicitors the fact of his conviction, that disclosure would have greatly assisted him in an endeavour to show that he had retrieved his character. But his failure to make such disclosure in itself, apart from the conviction, excludes any possibility of a holding that he was in 1946, or had become in 1947 a man of good character."

4.1.12 In Re Mayers and Casino Surveillance Authority (1993) 29 ALD 585 the ACT Administrative Appeals Tribunal affirmed a decision to refuse the applicant a casino employees licence under the Casino Control Act 1988 (ACT). In his application the applicant had failed to disclose convictions for two relatively minor offences. In finding against the applicant the Appeal Tribunal stated:

"While there is no doubt in this case about the applicant's knowledge and ability to fit him as a casino employee we are satisfied that he has demonstrated, in his evidence before this Tribunal and his dealings with the Authority a serious lack of honesty. We are satisfied that the applicant set out to dupe the Authority as to his previous convictions... those actions are entirely inconsistent with and not the actions of a person who is scrupulously honest. "

In McEvoy v Director-General, Department of Fair Trading ([2000] NSW LEC 183) the Land and Environment Court of New South Wales considered an appeal against a refusal to grant the applicant registration under the Valuers Registration Act 1975. Central to the Court's decision to uphold the refusal was the applicant's failure to disclose convictions for two drug offences and his conviction for dangerous driving and subsequent disqualification. The Court commented that:

"The obligation of complete candour and disclosure is an important element of good character. Its absence does not give one confidence that in the course of his work as a registered valuer the applicant will not overlook in his valuation reports all relevant facts or opinions which may bear upon the question of value. Its absence suggests that the accuracy and reliability of the applicant's work would have to be checked. "

4.1.14 More recently, the NSW Court of Appeal considered a case where a solicitor had, in his application for a practising certificate, failed to disclose his conviction on two counts of supplying a dangerous drug. The Court held that the solicitor's negative answer to the question "are you aware of any facts or circumstances which might give rise to a complaint or disciplinary proceedings against you or which might influence or affect your good fame and character or your fitness to remain a legal practitioner?" revealed a lack of awareness of professional standards and at worst, a deliberate false statement in a statutory declaration. Prothonotary, Supreme Court (NSW) v Darveniza [2001] NSWCA 113.

4.1.15 The OFT's application form puts applicants on notice that the criminal history of applicants and their directors is relevant to the OFT's assessment of the application for a travel agents licence. On page 9 of the application form under the heading PART O HISTORY, the form states in bold print "The Department of Fair Trading will conduct a criminal record check in respect of the Individual Applicant, all Directors of a Corporation, all Partners and all Managers". Accordingly, The Applicant's Director was on notice of the importance of disclosing his criminal convictions when he completed the Application.

4.1.15 Furthermore, on page 11 of the form in a section headed PART P DECLARATION BY APPLICANT the Applicant's Director signed the form below the following declaration:

"I hereby apply for the grant of a Travel Agents Licence and certify that the particulars specified in this application and all attachments are to the best of my knowledge true and correct in every detail."

4.1.16 The applicant's failure to include his criminal convictions in his application is of significance and not inconsequential. The omission of the convictions is relevant to the purpose of the application in that the application form clearly invites disclosure of any offence or conviction within the last 10 years. It is also significant because the nature of the offence is directly relevant to the sort of work which the licence entails the Applicant to do. This goes to his character and whether or not he is a fit and proper person to hold a licence.

The Applicant's explanation for the omission

4.1.17 The Applicant Director has not provided an explanation as to why he failed to disclose his prior convictions.

4.1.18 The Director has provided an explanation as to how and why the stealing offence took place. However, the explanation is totally inconsistent with the explanation that the Applicant's Director gave the police. In his letter to the OFT the Director stated that the reason he committed the offence was because as he was about to go into the petrol station to pay for the petrol, one of the passengers in his vehicle stuck a knife to his neck and told him to drive off. In his report to the police, the Director stated that he had lost his wallet and had no money to return home, he intended to tell the "operator" that he would send the money but "got scared" and drove off without paying.

4.1.19 Clearly, the Director was either able to pay for the fuel but was prevented from doing so by a passenger in his car who had put a knife to his neck and told him to drive off or he lost his wallet and therefore could not pay for the fuel. In other words, the Director was either dishonest with the police or he was dishonest with the OFT. In the absence of any evidence to corroborate either story, it may be that the Director was being dishonest with both the Police and the OFT. It should be noted in this regard that the Director entered a plea of guilty to the charge and accordingly, no evidence would have been led by the police.

4.1.20 It is submitted that whether or not the Tribunal accepts the Director's explanation to the police, the Tribunal should reject the Director's explanation to the OFT on the basis that:

(a) the explanation provided to the OFT is more favourable to the Director than the explanation that he gave to the police. Accordingly, there is no logical explanation for giving the police a less favourable explanation.

(b) the explanation provided to the OFT discloses a defence to larceny that was available to the Director at the time that he was charged. Accordingly, there is no logical explanation for giving the police an explanation that the theft was a voluntary act if it was not; and

(c) if someone had put a knife to the Director's neck, one would expect him to inform the police of this offence.

4.1.21 In view of the above, the more probable scenario is that the Director concocted the explanation to the OFT because such an explanation places the Director in the most favourable light.

Has the Applicant reformed?

4.1.22 There has been a time lapse of about 3 years since the Director was convicted of the driving offence and 9 years since the Applicant was convicted of the dishonesty offence. Given the nature of the offences and the fact that they are both relatively minor as evidenced from the relatively small fines imposed, the time lapse is substantial. Accordingly it is submitted that sufficient time has lapsed between the conviction and the making of the Application for the Commissioner and the Tribunal to consider evidence or submissions from the Applicant that the Director has reformed. However, the onus he bears to establish that he is a fit and proper person to become a member of the travel agents industry is a heavy one. As Walsh JA said in Ex parte Tziniolis, Re the Medical Practitioners Act [1967] 84 WN275:

"One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man."

4.1.23 On 18 August 2003, the Applicant provided the OFT with three character references: Keith Cowan of YHA Travel NSW; Amelia Mulconry of Backpackers Travel Centre; and Leanne Innes of STA Travel. It is submitted that these reference carry very little weight in that the references relate to the company or business Oz Snow Adventures and Waves Surf School. While one reference makes mention of the Director, the character references do not relate to the Director. Furthermore, the referees do not state that they are aware of the conviction. In the circumstances, it is difficult to conclude that the Director is of good fame from these references.

4.1.24 On 10 September 2003, the Applicant provided the OFT with a further 4 character references: Paul Fitzgerald of Paul Fitzgerald Pharmacy Bondi Beach; Kellie McBride of Snowy Valley Resort; Dr Jody McIvor of Broome Medical Centre, Broome W A; and David Eagle of Save Bondi Beach. These references do relate to the Director. Three of the four make reference to the conviction but only one of the three states what the conviction relates to. None of the references state what explanation was provided to them concerning the circumstances in which the offence and subsequent conviction occurred.

4.1.25 However, there is positive evidence that the Director has not reformed. This evidence consists of the recent acts of dishonesty, namely the failure to disclose the conviction involving dishonesty in application form in circumstances where it was clear that such disclosure was required and the dishonest explanation provided for the offence.

Other relevant considerations

4.1.26 The Director has not paid for the fuel. The owners of the service station are accordingly still $40 out of pocket.

4.1.27 The purpose of the Act is to regulate travel agents through the licensing regime, and thereby protect consumers from unfair practices and monetary loss. It is submitted that granting a licence to applicants or officers of applicants who have a criminal record and who have not demonstrated that they have reformed would be contrary to the purpose of the Act and against the public interest.

4.1.28 Furthermore, the recent conduct of the Director shows that the Director lacks the necessary degree of integrity expected of a person of good character

5. Conclusion

In summary, it is submitted:

5.1 Sub-section 10(4) is in mandatory terms: the Director-General has no discretion. The Tribunal, standing in the position of the Director-General, likewise has no discretion in refusing an application for a licence if it appears to the Tribunal that paragraphs 10(4)(d) and (h) of the [Act] apply.

5.2 A consideration of the relevant circumstances shows that the Applicant's Director is not of good reputation or character and not a fit and proper person to hold a travel agent's licence.

5.3 Paragraphs l0(4)(d) and (h) apply to the Applicant.

5.4 The Tribunal should affirm the Decision."

The Applicants' Submissions

24 Mr. Rogers for the Applicants submitted that the circumstances of this matter do not justify the refusal of the licence application. It is conceded that Mr. Goodall has the conviction as alleged and it is also conceded that Mr. Goodall deliberately concealed the convictions. Nevertheless, it is submitted that the act of concealing the convictions should not be viewed without consideration of the nature of the actual conviction that was concealed. He submitted that the offences for which Mr. Goodall had been convicted are at the lower end of the scale of seriousness. While it does Mr. Goodall no credit that he incurred those convictions or that he concealed them, it is submitted that the seriousness of these acts is not such that it warrants refusal of the licence.

25 Mr. Rogers sought to distinguish each of Ms Bozinovska's authorities on their facts. This submission is founded on the basis that in each of those cases the relevant offences and their repetition were of a far more serious nature than Mr. Goodall's offences.

26 With respect to Ms Bozinovska's submission that there is positive evidence that Mr. Goodall has not reformed, Mr. Rogers argues that this is not a matter in which Mr. Goodall needs to demonstrate that he has reformed. He submits that the events of 15 April 1994 that lead to Mr. Goodall's conviction for stealing were an isolated or passing departure from proper standards amounting to something less than proved unfitness. That being the case, he submitted, there is no unfitness from which Mr. Goodall needs to reform.

27 Mr. Rogers submits that when Mr. Goodall's failure to disclose his convictions is considered with regard to the character of the conviction that was concealed and all the other relevant circumstances, the Tribunal should not be persuaded that there is any risk to the public associated with the grant of the licence sought or that Mr. Goodall is not of good reputation or character or in any other way would not be a fit and proper person to be a licensee.

Reasons and decision

28 Pursuant to section 10(4) of the Act the licence application must be refused if it appears that Mr. Goodall is not of good reputation or character or in any other way would not be a fit and proper person to be a licensee if he were to apply for the licence personally.

29 The test of whether an individual is a fit and proper person to hold a licence involves consideration of their honesty, knowledge and ability. Although wider considerations are also involved, it is essentially a question of the person's worthiness to perform the role in question and their reliability for the future. In the case of a licence application by a body corporate it is necessary to consider those characteristics as they apply to the applicant's directors.

30 In the circumstances of this matter, the relevant director is Mr. Goodall. It is common ground that Mr. Goodall has a conviction involving dishonesty that dates back to 1994. It is also common ground that Mr. Goodall concealed that conviction when making the licence application on behalf of the Applicant. The issue for determination is whether it is appropriate to grant the Applicant the licence it seeks in spite of Mr. Goodall's conduct. In determining that issue it is necessary to consider all the relevant circumstances.

31 I agree with the views expressed in the authorities to which Ms. Bozinovska has referred me. I accept that when a person has been guilty of sustained serious misconduct in connection with his occupation (i.e., conduct which is inconsistent with good character), there can be no finding of good character except upon `solid and substantial grounds' and that will almost invariably require proof of a considerable subsequent period of exemplary behaviour. However, I do not agree that those authorities are applicable to this case. Each of those authorities relates to circumstances that are quite different to those of this matter.

32 I found Mr. Goodall to be a credible witness who provided a plausible explanation for the April 1994 events that lead to his conviction. Contrary to what Ms. Bozinovska has submitted, I do not agree that one would expect Mr. Goodall to inform the police if someone had put a knife to his neck and I reject the Commissioner's submission that there was no logical explanation for telling the police that the theft was a voluntary act if it was not. In my view it is perfectly plausible that Mr. Goodall would have been more concerned about the consequences of telling the Police the truth than he would have been of the consequences of giving a false account of the events. I therefore draw no negative inference from the inconsistent explanations that that Mr. Goodall gave to the Commissioner and to the police.

33 I agree with Mr. Rogers' submission that Mr. Goodall's conduct in concealing his conviction must not be considered in isolation from the character of the offence itself. In my view, Mr. Goodall's conviction and his conduct in concealing his conviction represent two isolated departures from proper standards separated by many years of unblemished record.

34 The impugned conduct must be placed within context and assessed against the background of Mr. Goodall's overall character. Mr. Goodall has operated his own business for the past five years and during that time he has not attracted any adverse comment. He has separated himself from the persons of ill repute with whom he had previously associated and the various testimonials in evidence point towards a person of good repute amongst those who deal with him in his private life and in his business operations.

35 In my view, Mr. Goodall has not demonstrated sustained serious misconduct. Nine years have passed since Mr. Goodall was convicted of the dishonesty offence. It was a relatively minor offence as evidenced from the small fine imposed. His business record is unblemished and there is no reason to believe that he would not continue to conduct his business activities in an honest manner.

36 In the circumstances, I do not agree with the Commissioner's opinion that that Mr. Goodall is not of good reputation or character or in any other way would not be a fit and proper person to be a licensee. While his actions do him no credit, they would not preclude him from holding a licence in his own right. They therefore do not preclude the Applicant from holding a licence.

37 Accordingly, the Commissioner's decision is set aside.

38 It then remains to be determined whether the Applicant has satisfied the other requirements to hold a licence as a travel agent. The Travel Agents Regulation 2001 ("the Regulation") prescribes a compensation scheme regulated in accordance with a Trust Deed set out in a schedule to the Regulation. The compensation scheme is known as the Travel Compensation Fund ("TCF"). Section 10(1) of the Act provides that before a licence is granted the Commissioner must be satisfied that the Applicant is a participant in the TCF or that the granting of the application would result in the Applicant being a participant in the TCF. Under section 11(2)(a) of the Act, it is a condition of a licence that the licensee shall be a participant in the TCF.

39 The TCF regulates the financial obligations of travel agents, provides compensation to consumers who are out of pocket because of conduct attributable to the licensee, and seeks to ensure that travel agents have and will continue to have sufficient financial resources. The TCF is administered by industry under the direction of a Board of Trustees consisting of government, industry and consumer representatives. It is a separate legal entity from the Commissioner. While the Commissioner regulates the licensing of travel agents, the Board of Trustees manages the compensation fund available to consumers. Nevertheless, the two organisations work together in some cases where financial viability and other licensing issues overlap.

40 There is no evidence before me to indicate that the Applicant is a member of the TCF or that the granting of the application would result in the Applicant being a participant in the TCF. In these circumstances it is appropriate to set aside the Commissioner's decision and remit the matter for the Commissioner's reconsideration.

41 I recommend that in reconsidering the application, Commissioner take account of the views that I have expressed in these reasons and my view that Mr. Goodall is a person of good reputation or character and that he is a fit and proper person to be a licensee. It is my view that the licence should be granted if the Applicant is able to satisfy the Travel Compensation Fund participation requirements.

Orders

1. The decision of the Commissioner for Fair Trading to refuse the application by Welby Pty Limited for a licence under the Travel Agents Act 1986 is set aside.

2. The matter is remitted for reconsideration by the Commissioner for Fair Trading with the recommendation that Welby Pty Limited be granted the licence sought if it satisfies the compensation scheme requirements provided for in section 10 of the Travel Agents Act 1986.