Papast v Commissioner for Fair Trading [2004] NSWADT 28 (13 February 2004)

Last Updated: 16 April 2004

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL GENERAL DIVISION

CITATION: Papast v Commissioner for Fair Trading [2004] NSWADT 28


PARTIES: APPLICANT
Peter Papast
RESPONDENT
Commissioner for Fair Trading



FILE NUMBERS: 033182

HEARING DATES: 15/10/2003

SUBMISSIONS CLOSED: 15/10/2003



DECISION DATE: 13/02/2004

BEFORE: Montgomery S - Judicial Member





LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Motor Dealers Act 1974

CASES CITED: Trlin v Director General, Department of Fair Trading [2000] NSWADT 192

APPLICATION: Motor Dealer - grant of licence
Motor Dealers Act - motor dealer - grant of licence

MATTER FOR DECISION: Principal matter


APPLICANT REPRESENTATIVE: APPLICANT
J Watts, counsel

RESPONDENT REPRESENTATIVE: RESPONDENT
K Bozinovska, solicitor

ORDERS: 1 The decision of the Commissioner for Fair Trading to refuse the application by Mr Papast for a wholesaler’s licence under the Motor Dealers Act 1974 is set aside.
2. The matter is remitted for reconsideration by the Commissioner for Fair Trading with recommendation that Mr Papast be granted the licence sought if he satisfies the other requirements provided for in section 12 of the Motor Dealers Act 1974


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 Mr Peter Papast for a wholesaler's licence under the Motor Dealers Act 1974 ("the Act").

2 By letter dated 21 May 2003, a delegate of the Commissioner advised Mr Papast that he had refused the application. The Application was refused on the grounds that Mr Papast is considered not a fit and proper person to be the holder of a licence; and not a person likely to carry on such a business honestly and fairly.

3 By letter dated 16 June 2003, Mr Papast applied for an internal review of the Commissioner’s Decision. The original decision was affirmed following the internal review. The Commissioner advised Mr Papast of that outcome by letter dated 25 June 2003.

Background

4 The Office of Fair Trading ("OFT") application form that Mr Papast completed ("the licence application form") contains a number of questions relevant to a licence applicant. On page 8 of the application form under the heading "PART K HISTORY", the form states in bold print "The Department of Fair Trading conducts criminal record checks in respect of all Individual Applicants, all Directors of Corporations, all Partners and all Managers named in applications for Motor Dealer licences". A question numbered "F" within Part K of the form ("Question F") sought information with respect to whether Mr Papast had "been convicted for any offence involving fraud or dishonesty or served a term of imprisonment in the last ten (10) years." The part of the form that provided for Mr Papast’s answer to Question F was ticked in the box marked "No". Mr Papast signed the application form.

5 A criminal check conducted by the OFT showed that:

(a) on 18 July 1995 Mr Papast appeared in the Hornsby Local Court and was convicted of Larceny. In respect of this offence, Mr Papast was fined $200 and ordered to pay compensation of $57.30; and

(b) on 26 June 1996, Mr Papast appeared in the Hornsby Local Court and was convicted of `State false name and place of abode’. In respect of this offence, Mr Papast was fined $300 plus Court Costs of $50 and disqualified from holding a licence for 4 months.

6 The facts advised to the Court in relation to the first offence were:

"On Sunday 25 June 1995 at 5.40am the defendant was observed to drive motor vehicle QEL-326 in the driveway of the BISIPA PTY LTD trading as Shell Select Willoughby, 616 Willoughby Road Willoughby, clean his windows and then pick up three cardboard boxes, containing a delivery of Donut and Croissants. He then got back into his vehicle placing the boxes on the passengers front seat and proceeded to drive away.

At no time did the management of the Service Station give defendant permission to take the boxes. ... Total invoice value $57.30"

7 The facts advised to the Court in relation to the second offence were:

"About 2.27 p.m. on Wednesday 22 May 1996 the defendant was seen driving north in Pacific Hwy Killara, in a Mazda, registered No. UCD-739 at about 60 kph. The defendant was seen using a mobile telephone whilst driving which was held in his hand. The defendant’s vehicle was stopped and when asked to produce his drivers licence was unable to do so.

He was asked to produce any papers with his personal name and address. The defendant claimed he had no identification. He supplied his name and address DOB as (Perry Papast 6/24 Challyer St Rose Bay 2029, DOB 080968). With the consent of the defendant Police searched his vehicle and found a credit card and a RTA licence cancellation within the defendant’s vehicle. He claimed those documents belonged to his brother. Police further questioned the defendant and he admitted his licence was cancelled and he was going with the assistance of his employer to appeal against the cancellation. When asked whose name he had supplied to Police said "His brothers." When asked why he supplied his brother’s name said, "I’m cancelled."

8 In his application for internal review of the Commissioner’s decision Mr Papast stated:

"I wish to explain why I answered `No’ to Part K(F). I misunderstood the terms of the question, I thought it related to more serious `fraud’ offences than those for which I had previously been convicted.

These were petty offences but I appreciate that my past offences were nevertheless crime related offences.

Had the question asked me to disclose any criminal convictions (rather than any offence involving fraud or dishonesty or served a term of imprisonment in the last ten (10) years."), I would not have hesitated to disclose these convictions on my application.

However, I accept this was an oversight. I appreciate that the reason for refusing a motor dealer’s licence to a person who has been convicted of any offence involving fraud or dishonesty or served a term of imprisonment in the last ten years, is a concern to ensure that a licensed motor dealer is the type of person who can `carry on such a business honestly and fairly’. Also to ensure that the person is a fit and proper person to be the holder of a licence.’

Reviewable decision

9 The reviewable decision is that of the Commissioner to refuse Mr Papast’s licence application. On 12 July 2000, Mr Papast filed an application with this Tribunal for Review of the Commissioner’s Decision. The matter was listed for direction on 5 August 2003 at which time the matter was listed for hearing on 15 October 2003. The matter proceeded on that day.

Applicable Legislation

10 The Commissioner’s decision was taken pursuant to section 12 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 12 of the Act provides:

"12 Grounds on which application to be granted or refused

(1) Subject to subsections (2), (4), (5), (6) and (8), the Director-General shall grant an application for a licence.

(2) An application for a licence made by a natural person shall be refused if it appears to the Director-General that:

(a) the applicant has not attained the age of 18 years,

(b) the applicant is disqualified from holding a licence,

(c) the applicant is an undischarged bankrupt,

(d) the applicant does not have, or is not likely to continue to have, sufficient financial resources to enable the person to carry on business pursuant to the authority that would be conferred by the licence if it were granted,

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

(f) the applicant does not have the prescribed qualifications or does not have sufficient knowledge or expertise to carry on such a business,

(f1)

(g) the applicant is in any other way not a fit and proper person to be the holder of a licence, or

(h) any person with whom the applicant intends to carry on, in partnership, business pursuant to the authority that would be conferred by the licence if it were granted is a person in respect of whom the Director-General would be required to refuse an application for the licence if that person were the applicant, or

(i) the applicant has (as an adult), within the preceding 10 years, been found guilty of an offence involving, or relating to:

(i) stealing a motor vehicle (within the meaning of section 154AA of the Crimes Act 1900 ), or

(ii) receiving, or unlawful possession of, a motor vehicle (within the meaning of section 154AA of the Crimes Act 1900 ) or a motor vehicle part.

(3) Without affecting the generality of subsection (2) (g), the Director-General may, in determining whether an applicant is not a fit and proper person to be the holder of a licence, have regard (if such be the case) to the fact that the applicant:

(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) had, at the time of the making of the application, a charge pending against the applicant in relation to such an offence, or

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

...

(6) An application for a licence may be refused if:

(a) some other licence is in force in respect of a place of business, or any part of a place, to which the application relates, or

(b) the carrying on of the business at that place or part of a place is, for any reason, unlawful.

(7) Where an application for a licence is refused, the Director-General shall forthwith, by notice in writing served on the applicant, inform the applicant of the refusal and of the ground on which the refusal is based and, where the application was accompanied by the prescribed fee for the licence, the Director-General shall, as soon as practicable, refund to the applicant that fee.

(8) An application for a licence shall not be granted until the applicant has paid to the Director-General the prescribed fee (which may include an initial contribution to the Fund) for the licence.

(9) Where an application for a licence is granted:

(a) the applicant shall be deemed to be the holder of the licence granted, and

(b) the Director-General shall forthwith, by notice in writing, inform the applicant of the granting of the application.

(10) Notwithstanding anything in this section, the Director-General may refrain from granting an application for a licence unless:

(a) any natural person to whom the application relates, and

(b) the directors and officers of any body corporate to which the application relates,

or such of them as the Director-General specifies or refers to, has or have appeared personally before the Director-General and satisfied the Director-General as to such relevant matters referred to in this section as the Director-General thinks appropriate."

11 The Tribunal has jurisdiction to review the Commissioner’s decision by virtue of section 38 of the Administrative Decisions Tribunal Act 1997 ("ADT Act") and section 20F of the Act. Section 38(1) of the ADT Act provides:

"38 Conferral of jurisdiction to review reviewable decisions

(1) The Tribunal has jurisdiction under an enactment to review a decision (or a class of decisions) if the enactment provides that applications may be made to it for a review of any such decision (or class of decisions) made by an administrator:

(a) in the exercise of functions conferred or imposed by or under the enactment, or

(b) in the exercise of any other functions of the administrator identified by the enactment".

12 The Tribunal’s powers are conferred by s 63 of the ADT 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."

13 By virtue of section 8 of the ADT Act, ‘[a] "reviewable decision" is a decision of an administrator that the Tribunal has jurisdiction under an enactment to review.

14 Section 20F of the Act provides:

"20F Reviews by the Administrative Decisions Tribunal

(1) If the Director-General:

(a) refuses to grant an application for, or suspends or (under any provision of this Act) cancels, a licence, or

(b) imposes a condition or restriction under section 13, or

(c) imposes a disqualification referred to in section 20E (1)(d),

the applicant for the licence, the person who held the licence or the person disqualified (as the case may be) may apply to the Administrative Decisions Tribunal for a review of the decisions of the Director-General.

(2) On an application for a review of a decision of the Director-General to refuse to grant a licence to a person because of a fact referred to in section 12 (3) or (5), the Administrative Decisions Tribunal may determine that the fact should be ignored on one or more of the following grounds:

(a) the triviality of the acts or omissions giving rise to the offence concerned,

(b) the time that has passed since the offence concerned was committed,

(c) the subsequent good behaviour of the offender,

(d) any other ground prescribed by the regulations."

The Commissioner’s case

15 In essence, the Commissioner’s case is that Mr Papast is not a fit and proper person to hold a wholesaler's licence under the Act and that he is not a person likely to carry on such a business honestly and fairly. The Commissioner relies on the record of Mr Papast’s convictions and his failure to declare those convictions as reason for refusing the application. Ms. Bozinovska provided written submissions that clearly outline the Commissioner’s case. Those submissions are referred to below.

16 Mr Papast 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 he had lied to Police in relation to his identity in relation to the second offence. However, Mr Papast denied that he had deliberately concealed his convictions when he signed the licence application form.

17 The Commissioner argues that this most recent conduct by Mr Papast 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.

Mr Papasts’ case

18 Mr Papast appeared and gave evidence on his own behalf. He also provided an affidavit that deals with the events that lead to his convictions. In relation to the first offence his evidence is:

"I was living with my parents and working for Hunter Holden at the time of the offence which occurred on 25 June 1995. At that time I was travelling from my home to Eastern Creek. I have always had a great deal of interest in motor vehicles not only in the purchase and sale of vehicles but in the driving of them also. At that time I was engaged by a racing team to competitively race motor vehicles. I had left my home at 5:30 am and was travelling with a friend who had stayed at my house overnight. He was not only my friend but part of the crew.

The petrol station is approximately a one minute drive from my home. As I drove past the station I saw that it was closed. However, I had driven into the station to wipe my windows clean as there was quite a lot of condensation from a dew and it had not completely cleared when I had warmed up the vehicle and as I was driving up the road as normally happens.

Whilst I was at the petrol station I got out of the car to wipe the windows and I saw the crates of "Bob & Pete's" food. Without thinking and in what I can only describe as a moment of recklessness I took the goods. I was very embarrassed to be charged and appear in front of Court in relation to what I had done. After I left the petrol station I felt very foolish and I actually threw out the goods. I was contacted by Constable Wardell the following day. I attended at the Police Station the following day and was charged with the offence. I readily admitted my guilt and paid compensation on the day I attended Court. I have never done anything like that before in my life and it was a great source of embarrassment.

The goods that I had taken were lying in the open on top of the bowser and I made a reckless and foolish decision which I have regretted to this day."

19 In relation to the second offence Mr Papast’s evidence is:

"On 22 May 1996 I was driving on Pacific Highway at Killara when I was pulled over by the Police for using a mobile telephone.

At the time I was pulled over I knew that I had been cancelled to drive. I panicked and when the Police Officer asked for my particulars I gave my brother's particulars. In or about February March of 1996 I commenced employment with James Langfield Holden which is located at Balgowlah. I was driving a Company car at the time the Police pulled me over.

At the time I gave my brother's details the Police Officer asked me whether or not I had anything that had my details on it and I allowed him to search the vehicle. I then decided that I should correct the information that I had given the Police Officer and gave him my full name. I also admitted that my driver's licence had been cancelled.

I was taken to the Police Station and charged. I then appeared before the Court at Hornsby. I felt very foolish that I had given the wrong information to the Police Officers. I have never impersonated another person or given false information to anyone about my personal details before or since."

20 In relation to his failure to declare the convictions on the application form Mr Papast’s evidence is:

"I completed the Application to the Office of Fair Trading to obtain a dealer's licence on 4 April 2003.

I attended the Office of Fair Trading to obtain the necessary forms. I took it home and completed it. I also had access to the Motor Dealers' Act and the Regulations to complete the questions.

At the time I answered question F I believed that question to mean I was required to list any offence for which I had gone to prison. I interpreted the question as asking whether or not I had been to prison in the last ten years. Now that I have had the opportunity to more carefully consider the question and it has been highlighted to me I can see that I had not paid enough attention to the word "or". At the time I completed the form I was of the view that my criminal record would be checked by the Office of Fair Trading. I understood that as I was receiving some responsibility by being granted a dealer's licence and it was all part of the New South Wales Government that my record would be checked. I had no intention whatsoever to deceive anyone in my completion of that form as to the offences for which I had been convicted in 1995 and 1996.

As I look back as to the offences I was charged with when I was twenty-three and twenty-four I feel embarrassed and consider that I have matured greatly since then. Since that time I have taken a greater responsibility for my own life and now my reputation and integrity are the most important things not only to me personally but also for my future business dealings. In or about 1997 I purchased my first property in Sydney. I now own, subject to mortgage, five properties in the Sydney area. I remain living at home with my parents. I contribute to my family home and the maintenance of my parents and have in recent times purchased them a new vehicle. At the age of twenty-three and twenty-four I did not have these responsibilities and only knew that I enjoyed working in the motor trade and had ambitions to work in it. Since that time however, I have achieved many of my goals and continue to do so. I look forward to my future and I hope that I will be granted the opportunity to be a Wholesale Dealer."

21 Mr Papast did not significantly vary this evidence under cross-examination.

22 Mr Papast put several testimonials in evidence. Testimonials were provided by:

Mr Brett Dale, General Manager, Australian Fleet Sales

Mr Frank Back, Partner, Back Schwartz Vaughan

Mr Vince Cagnoni, Managing Director, Homebush Auto Exchange

Mr Tariq Ali, Director, Riqali Wholesalers Pty Ltd

23 It is apparent from the date of those testimonials that each was prepared following the initial decision to refuse the licence application and prior to Mr Papast seeking an internal review of the decision. Each of those testimonials asserted that Mr Papast is a person of good character. Those testimonials were admitted into evidence subject to weight.

24 Mr Tariq Ali, the author of one of those testimonials, attended and gave evidence on behalf of Mr Papast. He was also cross-examined. His evidence was consistent with the statement provided in his testimonial which states:

"I, Tariq Ali, have known Peter Papast for approximately eight years; a long business relationship built on trust and goodwill. I have been an auctioneer and major buyer for both Valley Motor Auctions, and Gamers Motor Auctions for the past ten years (1992-2002), and now have my own wholesale company based in Newcastle. All three companies have done major business with Peter Papast as a major representative of both Dale Ford and Australian Fleet Sales. Peter is well respected in the industry due to his success, honesty, and kind approachable matter.

His employer relied heavily on his personality, skill and reputation to attract new business, and I watched him do the job of eight managers, as a much valued contributor to Australian Fleet Sales growing to the success it is today. Peter was in charge of a large team of people and earned their respect through example, fine tuning systems for efficiency on all levels including staff control, the purchasing and selling of millions of dollars worth of vehicles, and managing budgets and debtor accounts.

In my opinion Peter would make a great motor vehicle wholesaler, and any major dealership would indeed be lucky to have him on board. He is loyal, honest, diligent and very good at what he does. I would happily employ him if the opportunity became available."

25 Mr Ali’s evidence before the Tribunal was consistent with the statement contained in his testimonial. Mr Ali confirmed that Mr Papast had explained his offences when he sought a reference. Notwithstanding his knowledge of those offences Mr Ali did not change his opinion about Mr Papast. Mr Ali added that there are only a few people in the industry that he feels he can trust and that Mr Papast is one. He said that Mr Papast is well respected within the industry. He has a high profile and is well known. No one would say the bad things about him.

The Commissioner’s Submissions

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

"2.5 The OFT has refused the application under subsection 12(2) of the MD Act. ...

3. Obligation on Director-General to refuse the Application

3.1 Sub-section 12(2) of the Act provides:

"An application for a licence made by a natural person shall be refused if it appears to the Director-General that:

...

(e) The applicant is not a person likely to carry on such business honestly and fairly;

(g) The applicant is in any other way not a t r and proper person to be the holder of a licence

3.2 Sub-section 12(2) is in mandatory terms: The Application "shall be refused" in the circumstances set out in that sub-section. The use of the term "shall" indicates that the Director-General is under an obligation to refuse the Application if it appears to the Director-General that one or more of the circumstances set out in paragraphs 12(2)(a) to (i) exists. This can be contrasted with the use of the term "may" in sub-sections 12(3), 12(5), 12(6) and 12(10), which subsections are not in mandatory terms.

3.3 The standard of proof or satisfaction required by sub-section 12(2) is stated as "appears". The term "appears" was considered by the Tribunal in Artarmon Auto Recycling Pty 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 to sub-section 10(2) 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 12(2) apply to the Applicant, the Commissioner is obligated to refuse the Application.

4. Do any one or more of the paragraphs set out in sub-section 12(2) apply to the Applicant?

4.1 The Commissioner submits that paragraphs 12(2)(e) and (g) of the MD Act (set out above) apply to the Applicant on the basis of the following considerations:

Convictions

4.1.1 The criminal record of the Applicant reveals a total of 3 convictions over the last 10 years. Two of the three convictions relate to offences involving dishonesty. The Applicant does not dispute that the convictions relate to the Applicant.

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 12(3) of the MD 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 offences involved fraud or dishonesty (paragraph 12(3)(a) of the MD 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, after consideration of the relevant circumstances, the Commissioner must reasonably be satisfied that the Applicant is not be a fit and proper person to hold a licence and is not likely to carry on the business honestly and fairly.

4.1.4 Sub-section 12(2) of the MD Act further provides that on appeal from a decision of the Commissioner, the Tribunal may determine that the prior convictions of the Applicant should be ignored on the grounds that:

"(a) the triviality of the acts or omissions giving rise to the offences concerned;

(b) the time that has lapsed since the offence concerned was committed;

(c) the subsequent good behaviour of the offender;

(d) any other ground prescribed by the regulations."

4.1.5 It is submitted, for the reasons set out below, that the convictions of the Applicant should not be ignored.

Fit and Proper

4.1.6 The expression "fit and proper" has been considered 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.

4.1.7 The authorities on the concept "fit and proper person" 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 Bar Association [1960] HCA 40; (1960) 104 CLR 186 at 189: See also Ziems v Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; (1957) 97 CLR 279 per Kitto JJ at 298 and Law Society of New South Wales v Moulton (1981) to New South Wales Law LR 736 per Hutley 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:

...

4.1.8 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."

4.1.9 The convictions that the Applicant sought to conceal are an offence of dishonesty.

4.1.10 Convictions of dishonesty, as here, are relevant to the determination of a person's fitness (Sakallis v Officer-in-Charge of Police, Paddington (1968) 88 WN (Pt 1)(New South Wales) 541). More particularly, they are relevant to the determination of a person's fitness to hold a motor dealers licence.

4.1.11 While it is conceded that the offences are not serious, they are not trivial. The fact sheet relating to the larceny offence reveals that the Applicant not only committed the theft but falsely denied having any knowledge of the theft. The fact sheet relating to the offence of giving of a false name and abode reveals that the Applicant told the police officer a string of lies before finally being compelled through further questioning to tell the truth. The Applicant did not readily disclose the truth as he states in his affidavit.

The Applicant's failure to disclose his convictions

4.1.12 The Applicant failed to disclose his prior convictions in the Application.

4.1.13 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".

4.1.14 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, ie., 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. "

4.1.15 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. "

4.1.16 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. "

4.1.17 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

4.1.18 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 (sic) licence. On page 8 of the application form under the heading PART K HISTORY, the form states in bold print "The Department of Fair Trading conducts a criminal record check in respect of all Individual Applicants, all Directors of Corporations, all Partners and all Managers named in applications for Motor Dealer licences ". Accordingly, the Applicant was on notice of the importance of disclosing his criminal convictions when he completed the Application.

4.1.19 Furthermore, on page 12 of the form in a section headed PART O DECLARATION BY APPLICANT the Applicant signed the form below the following declaration:

"I hereby apply for the grant of a Motor Dealer's 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."

4.1.20 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

4.1.21 The explanation subsequently provided for the omission (see paragraph 1.5 above and paragraph 21 of the Applicant's affidavit) should be rejected for the following reasons:

(a) the Applicant has a sound understanding and comprehension of the English language;

(b) the Applicant was aware that he was convicted of stealing and lying. It is submitted that most people understand that both stealing and telling a lie is dishonest;

(c) the Applicant had the option of erring on the side of caution and disclosing convictions that the OFT may or may not have been interested in or erring on the side that was most advantageous to him. The Applicant consciously chose the latter;

(d) the Applicant has attempted to escape responsibility for his actions on two previous occasions:

(i) The fact sheet relating to the larceny offence states that the Applicant "denied any knowledge of the theft"(see page 3 of the fact sheet); and

(ii) The fact sheet relating to the false name and place of abode indicates that the Applicant was prepared to lie to escape responsibility for his actions and did lie to the police officer until he was no longer able to sustain the lie.

(e) the explanation provided by the Applicant to the OFT differs from the explanation provided in paragraph 21 of his affidavit. While the two explanations are not inconsistent per se, the fact that there are two explanations (one being that he thought the question was asking him if he had committed a serious fraud offence, the other that the question was asking him if he had gone to prison), suggests that the Applicant has reconsidered the question recently and provided an explanation that would exonerate his conduct. In other words, the Applicant's explanation is not a truthful account of how he interpreted the question at the time he completed the Application.

4.1.22 It is submitted that the matters set out in paragraph 4.1.21 support the conclusion that the Applicant's failure to disclose the convictions in his Application was a conscious decision to misconstrue the question in his favour and not suffer the consequences of past misconduct.

Has the Applicant reformed?

4.1.22 There has been a time lapse of about seven years since the last conviction. Given that the OFT only requires disclosure of convictions during the last ten years, 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 Applicant has reformed.

4.1.23 It is also conceded that sufficient time has lapsed for the purposes of paragraph 12F(2)(b) of the MD Act. However, for the reasons set out below, it is submitted that the Tribunal should not exercise its discretion to determine to ignore the Applicant's convictions on the basis of paragraph 12F(2)(b).

4.1.24 The onus that the Applicant bears to establish that he is a fit and proper person to become a member of the motor dealers industry is a heavy one. As Walsh JA said in ex parte Tziniolis; Re the Medical Practitioners Act [1967[ 84 WN 275:

"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"

4.1.25 On or about 16 June 2003, the Applicant provided the OFT with four written character references: Brett Dale of Australian Fleet Sales; Frank Back of bsv Back Schwartz Vaughan Solicitors; Vince Cagnoni of Homebush Auto Exchange; and Tariq All of Riqali Wholesalers Pty Ltd. However, it is submitted that these references carry very little weight as none of the referees state that they are aware of the convictions. In the circumstances, it is difficult to conclude from these references that the Applicant is of good character or a fit and proper person.

4.1.26 However, there is positive evidence that the Applicant has not reformed. This evidence consists of the recent acts of dishonesty, namely the failure to disclose the conviction involving dishonesty in the application form in circumstances where it was clear that such disclosure was required. It also consists of the false statement in paragraph 7 of the Applicant's affidavit that he "readily admitted [his] guilt" and in paragraph 11 that he corrected the false information that he had given to the police officer at the point that he says in the affidavit he did when in fact he had told a few more lies.

4.1.27 For the reasons set out above, the Tribunal cannot be satisfied that the convictions of the Applicant should be ignored on the basis of paragraphs 12F (2)(b) and (c).

Other relevant considerations

4.1.26 The offences for which the Applicant was convicted took place within a period of two years. This illustrates that the Applicant did not learn from his first conviction.

4.1.27 The purpose of the Act is to regulate, through the licensing regime, various motor dealers including wholesalers and thereby protect consumers from unfair practices and monetary loss. It is submitted that granting a licence to 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.

5. Conclusion

In summary, it is submitted:

5.1 Sub-section 12(2) 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 the situation described in paragraph 12(2)(e) and (g) of the MD Act exists.

5.2 A consideration of the relevant circumstances show that the Applicant is not a fit and proper person to hold a motor dealers licence and that he is therefore not likely to carry on the business honestly and fairly.

5.3 Paragraphs 12(2)(e) and (g) apply to the Applicant.

5.4 The Tribunal should affirm the Decision."

Mr Papasts’ Submissions

27 Mr. Watts appeared for Mr Papast. He submitted that the circumstances of this matter do not justify the refusal of Mr Papast’s licence application. It is conceded that Mr Papast has the convictions as alleged and it is also conceded that Mr Papast failed to disclose the convictions. Nevertheless, it is submitted that the act failing to disclose 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 Papast had been convicted are at the lower end of the scale of seriousness.

28 Mr. Watts contends that Mr Papast is a fit and proper person to hold the licence that he seeks. He argues that Mr Papast erroneously responded to a question in the application form that he did not have a criminal record. Particularly, Mr Papast misunderstood the question asked at Part K question F of the application form. Mr Papast had understood that question to relate to commission of any serious criminal offences.

29 Mr. Watts asks that the Tribunal particularly take into account (a) the minor nature of the offences; (b) the time that has past since the offences were committed; (c) Mr Papast’s subsequent good behaviour; (d) the excellent testimonials as to Mr Papast’s character and the fact that he has been involved in the motor industry for some significant period of time and no criminal offence relates to his involvement in the industry and work he has performed in the industry.

30 Mr. Watts also asks that the Tribunal take into account Mr Papast’s age at the time of the offences, the facts of the offences and the manner in which a guilty plea was entered to the offences for which he was charged.

31 Mr. Watts further submits that to deny Mr Papast a licence will have a far greater impact upon Mr Papast than is warranted in light of the nature of the offences.

32 Mr Watts argued that the licence that Mr Papast is seeking is a wholesalers licence. This would allow him to deal with others in the industry. Mr Papast has done well in the industry and has done so for many years. Mr Ali’s evidence supports this assertion. Mr Papast has dealt with Mr Ali as a regular customer. Mr Ali stated that he finds dealing with Mr Papast "a refreshing change". The Tribunal must consider whether or not others in the industry can have reasonable confidence in Mr Papast. The oral evidence given by Mr Ali supports the view that they can have that confidence.

33 With respect to the failure to disclose convictions in the Application Form, Mr Watts argues that the Commissioner’s position is based on a rejection of Mr Papast’s evidence. The Tribunal should not conclude that there was a deliberate act of deception for gain. Mr Watts submits that Mr Papast provided a credible and consistent explanation for his failure. He filled in the Application Form at home where he had a booklet to help but he did not have guidance from anyone about what was required. He had some assistance with checking of his spelling but not with respect to the content of the form. Mr Papast did not refer to the Act. As a non-lawyer Mr Papast made a distinction between minor and serious convictions. He read the introduction to Part K and he therefore knew that if the Commissioner checked he would find out about the offences.

34 With respect to the first conviction Mr Papast readily admitted guilt at the Court and paid compensation. The Commissioner has misstated Mr Papast’s evidence in suggesting that he has tried to gloss over the true facts of the incident that lead to his conviction.

35 With respect to Ms Bozinovska’s submission that there is positive evidence that Mr Papast has not reformed, Mr. Watts argues that far from showing a continuing pattern of dishonest conduct, the evidence shows that Mr Papast has done the exact opposite. This is apparent from the testimonials provided on his behalf and in particular the evidence given by Mr Ali.

36 While the testimonials don't refer to Mr Papast’s offences, the evidence indicates that the referees knew of the convictions. The Commissioner has approached the matter from the most negative viewpoint. He ignores the clear notion that the references were sought after the initial refusal of the licence application. It defies logic that Mr Papast did not disclose the reasons for the refusal to the referees.

37 Mr. Watts 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 Papast’s offences. He observed that in contrast to the circumstances in the matter of Trlin v Director General, Department of Fair Trading [2000] NSWADT 192 where there was a Cold War between Mr Trlin and the Commissioner, Mr Papast has universal respect within the industry.

38 Mr. Watts submits that when Mr Papast’s failure to disclose his convictions is considered with regard to the character of the convictions that were not disclosed 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. The Tribunal should be satisfied that Mr Papast is a fit and proper person to hold the licence and that he would conduct the business fairly.

Reasons and decision

39 Pursuant to section 12(2) of the Act the licence application must be refused if it appears that Mr Papast is not a person likely to carry on business honestly and fairly, or that he is in any other way not a fit and proper person to be the holder of a licence.

40 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.

41 It is common ground that Mr Papast has convictions involving dishonesty that date back to 1995. It is also common ground that Mr Papast failed to disclose those convictions when making the licence application. The issue for determination is whether it is appropriate to grant Mr Papast the licence he seeks in spite of Mr Papast’s conduct. In determining that issue it is necessary to consider all the relevant circumstances.

42 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.

43 I found Mr Papast to be a credible witness.

44 I agree with Mr. Watts’ submission that Mr Papast’s conduct in concealing his conviction must not be considered in isolation from the character of the offences themselves. In my view, Mr Papast’s convictions and his conduct in concealing his convictions represent isolated departures from proper standards separated by many years of unblemished record.

45 The impugned conduct must be placed within context and assessed against the background of Mr Papast’s overall character. Mr Papast has operated in the industry for many years and during that time he has not attracted any adverse comment. The various testimonials in evidence point towards a person of good repute amongst those who deal with him in his business operations. In my view, Mr Papast has not demonstrated sustained serious misconduct. Almost eight years have passed since the events that lead to Mr Papast’s last conviction. Since that time his record is unblemished and there is no reason to believe that he would not conduct his business activities in an honest manner.

46 Mr Ali was also a witness of credit. It is clear that he holds Mr papast in high regard and I accept that this is a common view throughout the industry where he operates.

47 In the circumstances, I do not agree with the Commissioner's opinion that that Mr Papast is not a person likely to carry on business honestly and fairly, or that he is in any other way not a fit and proper person to be the holder of a licence. While his past actions do him no credit, they do not preclude Mr Papast from holding a licence.

48 Accordingly, the Commissioner’s decision is set aside.

49 It then remains to be determined whether Mr Papast has satisfied the other requirements to hold a licence as a wholesaler. As indicated above, section 12 of the Act sets out a number of criteria that must be satisfied before a licence may be issued. There is no evidence before me to indicate that Mr Papast has satisfied each of those criteria. In these circumstances it is appropriate to set aside the Commissioner’s decision and remit the matter for the Commissioner’s reconsideration so that Mr Papast’s ability to satisfy the remaining criteria can be assessed.

50 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 Papast is a person likely to carry on business honestly and fairly and that he is a fit and proper person to be the holder of the licence he has sought. It is my view that the licence should be granted if Mr Papast is able to satisfy the remaining criteria in section 12 of the Act.

Orders

1. The decision of the Commissioner for Fair Trading to refuse the application by Mr Papast for a wholesaler's licence under the Motor Dealers Act 1974 is set aside.

2. The matter is remitted for reconsideration by the Commissioner for Fair Trading with the recommendation that Mr Papast be granted the licence sought if he satisfies the other requirements provided for in section 12 of the Motor Dealers Act 1974.