Edward Lees Imports Pty Ltd v Department of Finance Services and Innovation t/as Commissioner of Fair Trading

By summons filed on 28 June 2019, Edward Lees Imports Pty Ltd (the plaintiff) sought leave to appeal against a decision of the Appeal Panel of the NSW Civil and Administrative Tribunal (the Appeal Panel Decision): Edward Lees Imports Pty Ltd v Commissioner for Fair Trading [2019] NSWCATAP 134. It was accepted that the summons was filed within the time specified in the Uniform Civil Procedure Rules 2005 (NSW).

The Commissioner for Fair Trading, the defendant (the Commissioner), did not wish to be heard on the grant of leave to appeal pursuant to s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act).

The background to the Appeal Panel Decision can be briefly summarised. On 14 March 2017 the Commissioner disqualified the plaintiff from being a licence holder or from being involved in the direction, management or conduct of the business for which a licence is required under the Motor Dealers and Repairers Act 2013 (NSW) for a period of 10 years (the Determination).

The plaintiff applied to the Tribunal for review of the Determination. On 27 July 2018, the Tribunal set aside the Determination and, instead, cancelled the plaintiff’s motor dealer licence and disqualified the plaintiff from holding such a licence for a period of two years (the Original Decision): Edward Lees Imports Pty Ltd v Commissioner for Fair Trading (No 3) [2018] NSWCATOD 116. The Tribunal did not find that any of the grounds in the Determination had been made out but disqualified the plaintiff on a new ground which had first been raised during cross-examination of Phillip Lee, the plaintiff’s sole director and shareholder.

On 31 May 2019, the Appeal Panel dismissed the plaintiff’s appeal from the Original Decision.

It was common ground that the Commissioner, by a delegate, exercised the relevant powers in the present case and that the Commissioner had the powers of the Secretary in the Act. Thus the Commissioner will be referred to in these reasons as the relevant decision-maker, as was the case. Where reference is made to the statutory terms, the word “Secretary” is used.

All references to legislation in these reasons are, unless otherwise stated, references to the Motor Dealers and Repairers Act.

This Court’s jurisdiction derives from s 83(1) of the NCAT Act which provides that a party to an external or internal appeal may, with the leave of this Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings.

Section 38 makes provision for the procedure of the Tribunal relevantly as follows:

I note that neither party submitted that the obligation to provide procedural fairness in s 38(5) imposed a higher obligation in the circumstances of the present case than was imposed by the common law.

Section 25(5) of the Act relevantly provides:

Section 8 of the Act defines “close associate”. It was common ground that Mr Lee was its close associate.

Section 27 of the Act relevantly provides:

Part 3 of the Act is entitled “Disciplinary Provisions”. Division 1 is entitled “Grounds for disciplinary action” and includes ss 38 and 39. Section 38 sets out the grounds on which disciplinary action may be taken against a licence holder, which include that the person has contravened, or the Secretary has reasonable grounds to believe that the person is likely to contravene, a provision of this Act or the regulations or of any other Act administered by the Minister (s 38(1)(a)) or that the person is not a fit and proper person to hold a licence (s 38(1)(c)) or that, if the person were not a licence holder, the Secretary would be required by the act to refuse an application by that person for a licence (s 38(1)(d)).

Division 2 of Part 3 is entitled “Disciplinary process” and contains ss 41-47. Section 41, which is central to the plaintiff’s primary submission, provides:

Section 42 confers power on the Secretary to suspend a licence when a show cause notice is given. Section 43 authorises the Secretary to “conduct inquiries and carry out investigations in relation to the matters to which a show cause notice relates and the submissions, if any, made by or on behalf of the person to whom the show cause notice relates.”

Section 46 provides that it is mandatory to cancel a licence if the holder is not a fit and proper person to hold a licence.

Part 4 of the Act, entitled “Obligations relating to sale, recycling and repair of motor vehicles” creates various offences. Section 52 prohibits odometer tampering and s 54 provides that it is an offence for licence holders or their employees not to report suspected odometer tampering to the Secretary. Section 100 of the Act, in Division 8 of Part 4, requires licence holders to keep records in the form prescribed by Part 3 of the Motor Dealers and Repairers Regulation 2014 (NSW) (MDR Regulations).

Regulation 42 prohibits motor dealers from advertising, or, during negotiations for the sale of a motor vehicle, specifying, odometer readings that are inaccurate if the motor dealer knows, or reasonably suspects such readings to be “false representation[s]”.

Section 176 provides that a person disqualified may apply to the Tribunal for an administrative review under the Administrative Decisions Review Act 1997 (NSW) (ADR Act).

The ADR Act applies to proceedings in the Tribunal. Section 58 imposes an obligation on an “administrator” (in this case, the Commissioner, being the person who made the decision) to lodge certain documents with the Tribunal. It relevantly provides:

Section 63 provides:

Section 7(1) of the ADR Act defines “administratively reviewable decision” as a decision of an administrator over which the Tribunal has administrative review jurisdiction.

The plaintiff was a licensed motor dealer and repairer, having been granted the motor dealer licence MD054381 on 11 June 2015.

On 16 February 2016 the Commissioner issued a show cause notice to the plaintiff (the First Show Cause Notice). The First Show Cause Notice was subsequently withdrawn, having been the subject of proceedings before the Tribunal which were remitted to the Commissioner.

It was common ground that a further show cause notice was issued by the Commissioner to the plaintiff on 5 April 2016 (the Second Show Cause Notice) which alleged that, when applying for a motor vehicle repairer’s licence on 2 September 2015, the plaintiff had failed to disclose what the parties referred to as “the Hornsby convictions”. The Second Show Cause notice did not rely on the Hornsby convictions per se, but rather the plaintiff’s failure to disclose them. It was also common ground that although the Second Show Cause Notice had not been withdrawn, it had not been proceeded with.

The Hornsby convictions arose as a consequence of Mr Lee’s plea of guilty at the Hornsby Local Court on 10 June 2015 to the offences set out in the following table:

On 6 January 2017, the Commissioner issued a further show cause notice to the plaintiff (the Third Show Cause Notice). A notice of suspension also accompanied this notice. The notice of suspension purported to suspend the plaintiff’s motor dealer licence for a period of up to 60 days.

The Third Show Cause Notice said as follows:

The Schedule to the Third Show Cause Notice set out the allegations against the plaintiff as follows:

Particulars of the allegations were set out in section 4 of the Schedule to the Third Show Cause Notice. Section 4.10, entitled “Close associates” alleged:

Section 4.11, entitled “ELI [the plaintiff] is not a fit and proper person” alleged in [82] that:

The three reasons given were first, the “serious and systematic breaches of the MDR Act and Regulations as set out above”; secondly, that the plaintiff conducted the business of a motor dealer in a “dishonest and unfair manner”; and, thirdly, that if the plaintiff did not already have a licence, the Secretary would be required to refuse an application for a licence because of s 38(1)(d) of the Act.

The notice concluded:

On 14 February 2017 the plaintiff’s solicitors responded to the Third Show Cause Notice. They addressed each paragraph of the notice.

As referred to above, the Commissioner made the Determination on 14 March 2017 to cancel the plaintiff’s motor dealer licence and disqualify him from holding such a licence for 10 years. In the reasons for the Determination the Commissioner set out the allegations which had been made in the Third Show Cause Notice before setting out the summary of findings.

In the Determination, the Commissioner found the following four specific contraventions of the Act or MDR Regulations (each of which was contained in the allegations in the Third Show Cause Notice set out above):

The plaintiff appealed to the Tribunal against the Determination. The hearing before Senior Member Dinnen took place over nine days: 5 and 6 June 2017, 19, 20, 21, 24, 26 and 28 July 2017 and 2 August 2017.

Because of the grounds of appeal raised and the way in which the hearing before Senior Member Dinnen was conducted it is necessary to set out in some detail what occurred. The relevant passages are set out below.

The cross-examination of Mr Lee commenced on 24 July 2017, the sixth day of the hearing. Ms Case, who appeared on behalf of the Commissioner before the Tribunal, asked various preliminary questions at the outset. The following exchange then ensued at tr. 74.40-75.1:

The matter rested at that point. However, on 28 July 2017, while Mr Lee was still in cross-examination and Mr Georges was, for a short period, appearing for the plaintiff in Mr Young’s absence, the following exchanges occurred at tr. 101.9-.13 and 101.44-102.4:

Ms Case subsequently asked Mr Lee whether he was charged with any criminal offences on 18 February 2015. The following exchange then occurred at tr. 105.47-107.45:

Senior Member Dinnen subsequently said, at tr. 108.8-.9:

Ms Case then put a question to Mr Lee to the effect that the convictions were recorded on the basis of facts provided to the court by police. Mr Georges objected and reminded Senior Member Dinnen that she had said that she would not go behind the facts. Ms Case confirmed that the police facts were “relevant to credit”. The following exchange occurred at tr. 109.20-.29:

Ms Case purported to justify her approach which led to the following exchange at tr. 110.5-.31:

Ms Case then began going through the police facts when she was interrupted by Senior Member Dinnen as follows at tr 111.8-.20:

At about this point, Mr Young, who had been temporarily absent from the proceedings, returned to replace Mr Georges, his instructing solicitor. Senior Member Dinnen provided the following explanation to Mr Young of what had occurred in his absence at tr. 112.28-.41:

There was then a discussion about the police facts. Senior Member Dinnen expressed her understanding that the police facts document was “the agreed statement of facts tendered in the criminal proceedings”. Mr Young submitted that there was nothing on the document that indicated that it was an agreed statement of facts. He submitted, correctly, that a plea of guilty amounted to no more than a plea to the constituent elements of the offence. Notwithstanding this objection, Senior Member Dinnen admitted the police facts as Exhibit R13 and described them as “agreed statement of facts tendered in criminal proceedings”. Mr Sheller SC, who appeared with Ms Case in this Court, accepted that the description was incorrect. I note that the police facts were not produced in answer to a summons to the Local Court; they were produced by the NSW Police in answer to a request from the Commissioner, as Mr Sheller explained in his submissions in this Court.

It is important to note at this point that police facts have no probative value on sentencing: CL v R [2014] NSWCCA 196 at [45]. Agreed facts must present, in a comprehensible way, the facts and circumstances of the offences upon which the court is to sentence the offender: Della-Vedova v R [2009] NSWCCA 107 at [14]. The statement of facts must be framed so that the court can discern what is agreed to be fact and what is merely assertion: Della-Vedova v R at [11]. A sentencing court is obliged to act on facts that are proved or which are contained in a statement of agreed facts. There was nothing before the Tribunal to indicate the basis on which Mr Lee was sentenced in the Local Court. The police facts were, accordingly, irrelevant.

Ms Case then moved to another topic, being an application made by Mr Lee for a licence, which she described as a motor vehicle dealer’s licence, on 2 September 2015. The application, which was eventually admitted and marked Exhibit R14, was actually an application by the plaintiff for a motor repairer’s licence. Mr Lee agreed that the application form had been filled in incorrectly in more than one respect, including that a negative answer had been given to the question:

Ms Case then asked Mr Lee whether a notice to show cause had been issued to the plaintiff on 16 February 2016, to which he answered in the affirmative. This was a reference to the First Show Cause Notice referred to above, which had been withdrawn because it was defective and which appears to have been superseded by the Third Show Cause Notice. Ms Case put to Mr Lee that the subject of the notice dated 16 February 2016 related to “the errors contained in that form”, being the application for the licence on 2 September 2015.

The following exchange then ensued at tr. 118.3-.46:

Mr Young continued to object as set out in the following exchange at tr. 121.3-.39:

Subsequently, Mr Young raised the decision of the High Court in Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36 as follows tr. 122.30-.44:

At the conclusion of the cross-examination, Ms Case tendered the plaintiff’s application for the motor dealer licence referred to above, which was marked Exhibit R14. The further exchange occurred at tr. 124.7-.21:

Mr Lee was re-examined but not in relation to these matters.

On 2 August 2017, the hearing of the matter resumed. Mr Georges called for production of documents in the Commissioner’s possession, including Mr Lee’s criminal record. Mr Georges asserted that the Commissioner had not served the document pursuant to s 58(1)(b) of the ADR Act. The following exchange occurred at tr. 5.28. -.37:

Directions were made for the parties to serve written submissions and file them with the Tribunal. The Commissioner’s submissions, dated 13 October 2017, included the following submissions concerning Mr Lee’s evidence:

The Commissioner submitted at [226] of the written submissions that Mr Lee obtained the plaintiff’s motor dealer’s licence on false pretences and that he had been in breach of the Act and the Regulations. It was accepted in this Court that these submissions were incorrect. At [228], the Commissioner submitted:

In conclusion, the Commissioner relevantly submitted at [229] that the applicant was “therefore” not a fit and proper person to hold a motor dealer’s licence due to matters which included “Mr Lee’s unfitness to hold a licence”. It can be seen that the convictions themselves were ultimately not relied on but rather Mr Lee’s conduct relating to those convictions.

In its submissions in response, the plaintiff submitted that the Commissioner was confined to the matters in the Third Show Cause Notice and was not entitled to raise additional matters.

The Tribunal set out the scope of its review in its reasons at [35] as follows:

The Tribunal addressed the relevance of Mr Lee’s convictions at [58] as follows:

The Tribunal assessed Mr Lee’s credit at [63] and said:

The Tribunal addressed Mr Lee’s antecedents as follows:

The Tribunal made the following findings:

The Tribunal found that, of the four contraventions of the Act in the Determination (set out above), none of the first three had been established and that, although the plaintiff had contravened s 100 (which required records to be kept), the contraventions were “technical” or “minor”: [166]. This was the only matter particularised in the Third Show Cause Notice that had been made out.

The Tribunal found, uncontroversially, that Mr Lee was the plaintiff’s director, secretary and sole shareholder and was, accordingly, a close associate of the plaintiff.

At [173] the Tribunal found that it had not been established that the plaintiff had conducted his business in a dishonest or unfair manner as alleged.

Having referred to the limits on its jurisdiction at [35] above, the Tribunal revisited the topic at [180] and said, in a passage which the plaintiff submits is erroneous:

The Tribunal turned to the topic of the criminal convictions and said in part:

The Tribunal found at [192]:

In conclusion, the Tribunal said at [193]:

The Tribunal made the following orders:

On 8 August 2018 the plaintiff filed a notice of appeal in the Appeal Panel. His grounds of appeal alleged, in substance, that he had been denied procedural fairness. The grounds were as follows:

The Commissioner submitted in writing to the Appeal Panel:

The hearing before the Appeal Panel took place on 13 December 2018. The Appeal Panel reserved its decision and published the Appeal Panel Decision on 31 May 2019. The Appeal Panel decided not to conduct a new hearing under s 80(3) of the NCAT Act but rather to hear argument on the evidence which had been before the Tribunal.

The Appeal Panel summarised the findings of the Tribunal at [49]-[50] of the Appeal Panel Decision as follows:

It was common ground that each of the passages highlighted in bold was erroneous. The references to a motor dealer’s licence were erroneous since the relevant licence was a motor repairer licence which had been granted under the Motor Vehicle Repairs Act 1980 (NSW) (before it was superseded by the present Act). None of the Hornsby convictions was for an offence under the Act. Each was for summary offences under the Road Transport Act or the Road Transport (Vehicle Registration) Regulation.

The Appeal Panel addressed the plaintiff’s submission that the Tribunal was confined to matters alleged in the Third Show Cause Notice as follows:

The Appeal Panel, at [64], identified the substance of the plaintiff’s complaint to be that “the reason for cancellation as determined by the Tribunal in its Reasons was not particularised in the Second Show Cause Notice.”

The Appeal Panel extracted [185]-[187] from the Original Decision at [66] and continued at [67]:

The Appeal Panel correctly summarised the plaintiff’s submission, which was reiterated in this Court, at [68]:

The Appeal Panel addressed the requirements of a show cause notice as follows:

The Appeal Panel rejected the plaintiff’s submission that the Tribunal was bound by the particulars of the grounds set out in the Third Show Cause Notice. It said at [77]:

The Appeal Panel reasoned from the proposition that there was no limitation on the submissions that might be made by the affected person (in [82]-[83]), that the Secretary was similarly free to adduce additional material. It concluded:

The Appeal Panel addressed the decisions of Sudath v Health Care Complaints Commission (2012) 84 NSWLR 474; [2012] NSWCA 171 (Sudath) and Sabag v Health Care Complaints Commission [2001] NSWCA 411 (Sabag) and distinguished s 43 of the Medical Practice Act 1992 (NSW) from s 41 of the Act in the present case. The Appeal Panel considered that the plaintiff was put on notice in the course of the hearing before the Tribunal that the Commissioner would rely on the additional matters which ultimately formed the basis of the Tribunal’s decision and concluded that there had been no denial of procedural fairness.

The Appeal Panel said, at [123]:

The amended summons set out a considerable number of grounds of appeal. However, in substance, the appeal raises two questions, both of which involve questions of law. In these circumstances it is not necessary to reproduce or address separately each of the grounds set out in the amended summons. It is appropriate that there be a grant of leave to appeal having regard to the importance of the questions of law raised. I note that the Commissioner ultimately did not oppose the grant of leave.

The first question is whether, as the plaintiff contended, s 41, which operates as a mandatory precondition to the exercise of power by the Secretary, continues to operate and bind the Tribunal or the Appeal Panel when reviewing a determination by the Secretary under s 41. If the answer to the first question is yes, the appeal must be allowed, it being common ground that the basis on which the Tribunal disqualified the plaintiff, that he attempted to contradict statements in the police facts, deflected responsibility to others, made false declarations in an application for a motor repairer licence and was insufficiently candid in his responses to the Tribunal on these topics, was not contained in the Third Show Cause Notice.

If the answer to the first question is no, the further question arises whether the Appeal Panel Decision must be set aside on the grounds that the Tribunal, in making the findings against the plaintiff in the Original Decision, failed to accord the plaintiff procedural fairness.

In substance, the plaintiff submitted that, as the Tribunal stood in the shoes of the Commissioner (or Secretary), it had no greater powers than conferred on the Secretary by s 41. On this basis the plaintiff argued that the Tribunal was prohibited from taking disciplinary action unless the basis for the disciplinary action was contained in a show cause notice.

In the alternative, the plaintiff submitted that even if the Commissioner, and the Tribunal, were not bound by the Third Show Cause Notice, there was a denial of procedural fairness in the way in which the matter which ultimately formed the basis of the Original Decision was raised, which vitiated the Original Decision. Mr Young, who appeared on behalf of the plaintiff, submitted that there was no particularisation of the additional matters relied upon and that, accordingly, the plaintiff did not know what was actually alleged against him. Mr Young relied on the errors made by the Appeal Panel concerning the type and gravamen of the Hornsby convictions as evidence of the dangers of proceeding without any such particularisation.

What procedural fairness requires depends on the circumstances. Disciplinary cases give rise to particular issues because of the nature of the consequences for the licence holder, or practitioner as the case may be. Where a criminal conviction is relied upon as the basis for an allegation of bad character (or, more usually, that the person is not fit and proper to hold the relevant licence or practise in the profession), this opens up an inquiry into the person’s character. Where the underlying conduct which gave rise to the conviction is relied upon, the person affected is entitled to adduce evidence as to whether the particular conduct occurred or to place it in context: Sudath at [49] (Basten JA) and at [102]-[104] (Meagher JA, Whealy JA agreeing). Where non-disclosure of convictions is relied on, the fact and circumstances of the conviction may also be relevant. In each of these instances, particulars are generally required in order that the affected person can appreciate on what basis the convictions are relevant.

In the present case, the allegation made which related to Mr Lee’s convictions was not referred to at all in the Third Show Cause Notice (which was the only operative one before the Tribunal). Nor did the documents, which the Commissioner purported to provide in accordance with s 58 of the ADR Act, include any documents which related either to the Hornsby convictions or to the plaintiff’s application for a motor repairer licence (which did not disclose the Hornsby convictions).

As outlined above, the Hornsby convictions first arose on 24 July 2017, the penultimate day of the evidence before Senior Member Dinnen, when Mr Lee referred to them in answer to the proposition put by Ms Case that he would not generally tell lies where there was a legal consequence (tr. 74.40-75.1, set out above). The topic was then further explored in cross-examination on 28 July 2017, the final day of evidence. Mr Sheller conceded that it would not have been open to the Commissioner to rely on the Hornsby convictions on the issue of whether the plaintiff was a fit and proper person had Mr Lee not answered Ms Case’s question in that way. However, Mr Sheller submitted that, once Mr Lee had referred to the convictions in that answer, the Commissioner was entitled to use the Hornsby convictions notwithstanding that the Commissioner had chosen not to proceed on the Second Show Cause Notice, which had relied on their non-disclosure.

Mr Sheller accepted that the Appeal Panel’s analysis in [77] was incorrect because it would defeat the purpose of a show cause notice if all that was required was a bald statement of one or more of the grounds set out in ss 38 or 39 of the Act. I understood him also to accept that the words in s 41(4), “in respect of the matters to which the notice relates”, implicitly required a degree of particularity in the notice in order that the affected person’s response could be directed at the matters considered by the Secretary to require cause to be shown. Indeed, Mr Sheller submitted orally that “a show cause notice must provide sufficient information to enable someone to answer it”.

However, Mr Sheller submitted that the contents of the show cause notice did not delineate all of the matters which the Tribunal was permitted to take into account. He contended that additional matters raised in the course of the hearing could be relied upon by the Commissioner, if adequate notice was given to the affected person, since s 41 did not confine the Tribunal or the Appeal Panel, but only the Secretary. He submitted that a show cause notice was, in effect, the beginning of the process but not its end.

The first issue is one of statutory construction. Before turning to s 41 itself, it is instructive to consider the authorities concerning the approach to be taken to statutory requirements for procedural fairness.

In Smith v NSW Bar Association (1992) 176 CLR 256; [1992] HCA 36, the NSW Bar Association commenced proceedings in the original jurisdiction of the Court of Appeal seeking that Mr Smith’s name be removed from the roll of barristers. Mr Smith gave evidence before the Court of Appeal. The Court of Appeal found that he had lied in his evidence and took this finding into account in deciding that he was guilty of professional misconduct and ought be removed from the roll. The High Court reversed the decision on the basis that the barrister had not been given notice that the court’s finding would, or might, be made or that the finding would be used against him in that way.

In a joint judgment, Brennan, Dawson, Toohey and Gaudron JJ said at 269 that procedural fairness required that the allegation of deliberate lying be made and that the barrister be given an opportunity to respond to it. Deane J said at 270:

In Walsh v Law Society of New South Wales (1999) 198 CLR 73; [1999] HCA 33 (Walsh), the High Court considered the legislative scheme for disciplinary action against legal practitioners. In Walsh, the Law Society appealed to the Court of Appeal against the dismissal of two complaints made against Walsh, a solicitor. Instead of conducting the appeal, as it was obliged to, under s 75A of the Supreme Court Act 1970 (NSW), the Court of Appeal went beyond the complaints formulated and particularised against the solicitor and addressed the question of his good name and character and fitness to remain on the roll.

The majority (McHugh, Kirby and Callinan JJ) summarised the provisions from the Legal Profession Act 1987 (NSW) as follows at [61]:

It continued at [62]:

In SAAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 228 CLR 294; [2005] HCA 24 (SAAP), the High Court considered the effect of s 424A of the Migration Act 1958 (Cth) in the context of an application for review by the Refugee Review Tribunal of the refusal by the Minister’s delegate to grant a protection visa to the appellant. Section 424A(1) required the Tribunal to give the applicant particulars of any information that the Tribunal considered would be the reason, or part of the reason, for affirming the decision under review, to ensure, as far as reasonably practicable, that the applicant understands why it is relevant, and to invite the applicant to comment on it. Section 424A(2) provided that the information and invitation had to be given by a prescribed method, involving handing, or sending, to the applicant, by post or other specified form of communication, a document.

The relevant particulars were given orally in the hearing before the Tribunal. The appellant argued that the Tribunal’s decision was invalid because of the failure to comply with s 424A. The Minister argued that because the particulars had been given orally at the hearing, there was no failure to accord procedural fairness.

The majority (McHugh, Kirby and Hayne JJ, Gleeson CJ and Gummow J dissenting) held that s 424A operated throughout the review conducted by the Tribunal and that it was not spent once the Tribunal had invited an applicant to appear before it to give evidence and make submission pursuant to s 425. The majority held that particulars, including particulars of the information obtained from the evidence of the elder daughter and of the invitation to comment, were required to be given in writing. Their Honours concluded that the Tribunal’s failure to comply with s 424A constituted jurisdictional error and rendered its decision invalid.

The minority held that the non-compliance with s 424A(2) did not invalidate the decision and that procedural fairness had been complied with.

In Sabag, the Health Care Complaints Commission (HCCC) brought a complaint against Dr Sabag in the Medical Tribunal alleging that he had carried out nerve block procedures without necessary safeguards, had incorrectly claimed for procedures and had failed to keep adequate patient records. Prior to the hearing, Dr Sabag had maintained that he had carried out nerve block procedures as claimed in the forms submitted to Medicare. However, during the hearing in the Medical Tribunal, Dr Sabag argued that he had not carried out nerve block procedures, but rather that he had administered injections to muscles near the site where his patients had reported pain. Although the HCCC did not amend the particulars of the complaint to accommodate Dr Sabag’s new stance, it argued that Dr Sabag was incompetent to carry out the new procedures which he contended that he had conducted. The Tribunal made findings in accordance with the HCCC’s final submissions.

The Court of Appeal (Sperling J, Beazley JA and Davies AJA agreeing) allowed Dr Sabag’s appeal on the ground that the Tribunal had misunderstood the evidence. A majority (Sperling J, Beazley JA agreeing) would also have allowed the appeal on the ground that the appellant had been denied procedural fairness in that the allegations that he was incompetent and misled community agencies were neither notified to the appellant, nor litigated. The matter was remitted to a differently constituted Tribunal.

In Frugtniet v Australian Securities and Investments Commission [2019] HCA 16; (2019) 93 ALJR 629 (Frugtniet), the High Court allowed an appeal from the Full Federal Court. The Court unanimously held that the Administrative Appeals Tribunal (the AAT) was not entitled to take into account spent convictions in reviewing a decision of the Australian Securities and Investment Commission (ASIC) since ASIC itself was not permitted to take into account such spent convictions. The majority (Bell, Gageler, Gordon and Edelman JJ) reasoned that the AAT’s jurisdiction was to stand in the shoes of the decision-maker whose decision was under review in order to determine for itself, on the material before it, the decision which can and should be made in the exercise of the power conferred on the primary decision-maker. Thus, the majority held that the AAT’s exercise of power was subject to the same constraints as those applying to the primary decision-maker.

Statutory provisions are to be construed in such a way as to promote their purpose: s 33 of the Interpretation Act 1987 (NSW). It is plain from the terms of s 41 that its purpose is to give the recipient notice of allegations made and an opportunity to respond. In order for the notice and opportunity to be other than worthless, it is necessary that there be some particularity to the allegations. This requires not only specification of the ground or grounds (such as those contained within ss 38 or 39) but also the provision of sufficient particulars to enable the recipient of the notice to respond in a meaningful way.

The decision-maker under s 41 (the Secretary, or delegate, in this case, the Commissioner) is prohibited by s 41(5) from imposing any disciplinary action on a person such as the plaintiff unless the person has been given a show cause notice and the Secretary has considered submissions made in accordance with the show cause notice. Although the Tribunal has access to the oral evidence and documents tendered in the hearing, it is bound by the constraints, including s 41(5), on the original decision-maker because it stands in the shoes of the original decision-maker (Frugtniet). Thus, it may not impose disciplinary action on the plaintiff on a particular basis unless the plaintiff has been given a show cause notice which identifies that basis by specifying the ground in s 38 or 39 and setting out the allegations. If s 41 is construed so as not to require the relevant show cause notice to include the matter on which the disciplinary action is ultimately imposed, the constraint in the section is rendered nugatory.

As referred to above, Mr Sheller conceded that the Third Show Cause Notice did not contain the allegations which formed the basis on which the Tribunal found that the plaintiff was not a fit and proper person and imposed disciplinary action. Thus, the Tribunal failed to comply with s 41. Its decision is therefore erroneous as a matter of law. The Appeal Panel ought to have set it aside and was in error in failing to do so. Accordingly, the appeal to this Court ought be allowed.

Although I am satisfied that the Appeal Panel Decision must be set aside as it was an error of law for it to consider the further matters raised when they were not alleged in the Third Show Cause Notice, it is desirable, although not strictly necessary, to address the second basis for the appeal.

In substance, procedural fairness at common law requires the person affected to be given notice of the case the person has to meet. Whether there has been a denial of procedural fairness is a matter of “practical injustice”: Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [37]-[38] (Gleeson CJ).

Although the Hornsby convictions could only ever be relevant to the ground in s 38(1)(c) of the Act, the convictions were potentially relevant on five separate bases: first, that the convictions per se had the effect that Mr Lee was not a fit and proper person to hold a motor dealer licence; secondly, that conduct underlying the convictions had that effect; thirdly, that the plaintiff’s non-disclosure of the convictions on its application for a motor repairer licence in September 2015 had the effect that the plaintiff was not a fit and proper person to hold a motor dealer licence; fourthly, that Mr Lee’s attitude to the convictions or the non-disclosure meant that he was not a fit and proper person; or, fifthly, that any of the above matters adversely affected Mr Lee’s credibility as a witness in the proceedings before the Tribunal.

The plaintiff was not aware that the Commissioner would be relying on either Mr Lee’s prior convictions; the underlying conduct; or his attitude to those convictions until 28 July 2017, the final day of the hearing of the evidence. Up until that time, the Commissioner had neither referred to them, nor had evidence been adduced in respect of them, apart from Mr Lee’s answer on 24 July 2017, when he appears to have apprehended that Ms Case was asking him about them. The plaintiff knew, however, that the Commissioner was aware of the Hornsby convictions, since the non-disclosure of the convictions had been the subject of the Second Show Cause Notice, which had not been proceeded with. The plaintiff can also be taken to have been aware, first, that the Commissioner chose not to include Mr Lee’s convictions or the plaintiff’s non-disclosure of such convictions in the Third Show Cause Notice, which was the subject of the proceedings in the Tribunal; and, secondly, that the Commissioner did not consider them to be relevant to the determination since no documents relating to them had been served under s 58(1)(b) of the ADR Act.

Because the Tribunal purported to take into account the convictions (the correctness of which will be addressed further below) on the question of Mr Lee’s character, it was in error in stopping Mr Lee from giving evidence about the circumstances underlying the convictions: Sudath at [49] (Basten JA) and at [102]-[104] (Meagher JA, Whealy JA agreeing). The Tribunal was also in error in misapprehending the legal standing of police facts, which could not be inferred to form the basis for the convictions, there being no evidence that they were agreed or as to their use, if any, in the proceedings before the magistrate at the Hornsby Local Court.

These matters, though amounting to errors of law, are subsidiary to the main issue: to what extent did there need to be any formal notification to the plaintiff of what was to be relied on by the Commissioner in addition to the allegations in the Third Show Cause Notice and for what purpose that further material was to be relied upon.

At the very least, the plaintiff was entitled to know whether Mr Lee’s convictions and response to them were to be relied upon solely on credit, or whether they were to be relied upon on the issue of his fitness, as a close associate of the plaintiff’s or in any of the possible ways set out above. It is highly undesirable that the demarcation between credit and issue changed throughout the hearing. At various instances, the plaintiff was assured by Ms Case and also by Senior Member Dinnen that matters would only be taken into account on credit. However, at other points, Ms Case informed the plaintiff’s legal representative and the Tribunal that they would also be relied upon on the issue of fitness. Senior Member Dinnen appeared to elide the distinction between fitness (an issue in the proceedings) and credit, at one point intimating, erroneously, that they were, in the circumstances of the present case, the same thing: cf. Walsh. Mr Sheller frankly conceded that the indication of the basis on which the evidence would be relied upon “chopped and changed”.

I reject Mr Sheller’s submission that once Mr Lee had “raised” his convictions in cross-examination, the Commissioner was entitled to rely on them for all purposes (the issue and Mr Lee’s credit) as long as it told the Tribunal and the plaintiff that it would rely on them for that purpose. It is plain from the transcript that Mr Lee raised the convictions because he thought that Ms Case was asking him about them. They were not raised by him in any exculpatory way but rather, by way of anticipatory self-defence, Mr Lee having been presumably warned that the Commissioner was aware of them, since they had been the subject of the Second Show Cause Notice. The present case is to be distinguished from Sabag where the practitioner had made a deliberate forensic choice to contest the allegations in a fundamentally different way in the Tribunal.

Further, procedural fairness, in my view, required that the plaintiff be given particulars of the additional matters relied on. It is not appropriate that a licence holder such as the plaintiff be required to guess from oral or written submissions what allegations are made against it. Unlike in the cases referred to above, which concern disciplinary proceedings in the medical and legal professions, the legislative regime under the Act makes no provision for a formal document, other than a show cause notice, to be given to the affected person. This is because the legislature has chosen to adopt a different model: namely, that there be a show cause notice, followed by a determination, which is then subject to administrative appeal in the Tribunal. In disciplinary proceedings against medical and legal practitioners, the legislature requires an “information” or “complaint” or other formal document, which initiates proceedings on behalf of the decision-maker, and which can, if legislative provisions authorise it, be amended after the commencement of disciplinary proceedings.

I reject the Commissioner’s argument that Sabag stands as authority for the proposition that, as long as a matter has been litigated, procedural fairness has been accorded. In Sabag, Davies AJA (who dissented on this issue) considered that the appellant had not been denied procedural fairness because the issues of his incompetence and his conduct in misleading agencies had been sufficiently litigated. However, the majority considered that, although the matter had been squarely raised by Dr Sabag in the hearing, there was nonetheless a denial of procedural fairness as it had not been notified to him that the HCCC would rely on these matters as professional misconduct.

In the present case, the further allegations made against the plaintiff were never particularised. I do not regard the submissions made by the Commissioner to the Tribunal as sufficient to amount to particulars. They were, in any event, served after the evidence had been closed. It is no answer to this to say that the plaintiff could have applied for leave to re-open.

Although the errors made by the Appeal Panel as to which licence application the non-disclosure of convictions related to and as to which statute created the offence could be regarded as errors of fact, they are symptomatic of the difficulties that arise in the absence of a statement of particulars (whether by way of a show cause notice or otherwise in a separate document) setting out the basis or bases on which the Commissioner alleged that the Determination was correct. I am satisfied that the decision of the Tribunal was vitiated by a lack of procedural fairness and that the Appeal Panel was in error in dismissing the appeal. The Appeal Panel Decision is the operative decision and must be set aside. The Original Decision must also be set aside except in so far as it sets aside the Determination.

Mr Sheller invited me to make findings about what was required to achieve procedural fairness, in the event that I found that what had occurred amounted to a denial of procedural fairness. I am not persuaded that it is appropriate that I do so in the circumstances of the present case. First, having decided that s 41 bound not only the Secretary but also the Tribunal and the Appeal Panel, the question is moot. Secondly, the denial of procedural fairness in the present case is fact-specific. It would be highly artificial in these circumstances to express a view on whether, for example, the furnishing of a statement of particulars in advance of a hearing before the Tribunal, or before the Commissioner’s case in the Tribunal in support of the disciplinary action the subject of a determination under review, would, but for s 41, fulfil the requirements of procedural fairness.

By reason of my conclusion that the Tribunal and the Appeal Panel are bound by s 41, there is nothing to remit to the Tribunal since the matters which formed the basis of the Original Decision and the Appeal Panel Decision were not within the allegations in the Third Show Cause Notice.

The parties agreed that there was no reason why costs ought not follow the event in accordance with the general rule under Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

For the reasons given above, I make the following orders: