Australian Transport Industries P/L & Anor v Auctioneers and Agents Committee [2002] QDC 143

DISTRICT COURT OF QUEENSLAND CITATION: Australian Transport Industries Pty Ltd v Auctioneers and Agents Committee [2002] QDC 143 PARTIES: AUSTRALIAN TRANSPORT INDUSTRIES PTY LTD First Appellant And KENNETH GEOFFREY RELTON Second Appellant V AUCTIONEERS AND AGENTS COMMITTEE Respondent FILE NO/S: D3078/1999 DIVISION: PROCEEDING: Appeal ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 30 May 2002 DELIVERED AT: Brisbane HEARING DATE: 22 May 2002 JUDGE: McGill DCJ ORDER: Appeal allowed; decision of the respondent of 2 June 1999 set aside; order in lieu that a motor dealer’s licence issue to the second appellant, and that a corporate licence issue to the first appellant. Order that the respondent pay the appellants’ costs of the appeal to be assessed. CATCHWORDS: APPEAL AND NEW TRIAL – Appellate Jurisdiction – occupational tribunal – Auctioneers and Agents Committee – qualifications for licence – fit and proper person – Auctioneers and Agents Act 1971 s.57(1) PRINCIPAL AND AGENT – Statutory provisions relating to agents – licensing – fit and proper person – effect of insolvency – Auctioneers and Agents Act 1971 s.57(1) Amos v Auctioneers and Agents Committee (1980) 6 QL 290 – applied Builders Licensing Board v Spurway Constructions (Sydney) -- 1 of 11 -- 2 Pty Ltd (1976) 135 CLR 616 – followed. Conte v Auctioneers and Agents Committee (1996) 18 QL 57 – applied. Re: Fredericks [1984] 1 Qd R 438 – followed. Re: H (a Pharmacist) [1972] Qd.R. 402 – applied. Hughes & Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127 – applied. Sobey v Commercial Agents Board (1979) 22 SASR 70 – applied. COUNSEL: P J Davis for the appellant A Musgrave for the respondent SOLICITORS: Burns Jameson for the appellant Crown Solicitor for the respondent [1] This is an appeal pursuant to s.17(1)(a) of the Auctioneers and Agents Act 1971 (“the Act”) from a decision of the respondent made under Part 3 of the Act. On 2 June 1999 the respondent rejected the second appellant’s application for a motor dealer’s licence, and rejected the first appellant’s application for a corporate licence, which application was dependent on the application of the second appellant for his licence. In the absence of a working director, a corporate licence cannot be issued: s.19(3)(c)(i). This appeal is brought from that decision to refuse those applications. [2] I considered the nature of an appeal under s.17 of the Act recently, in Stephens v Auctioneers and Agents Committee (Appeal 5069/00, 16/5/02, unreported) when I followed the decision of Mylne DCJ in Amos v Auctioneers and Agents Committee (1980) 6 QL 290. The appeal is in effect a re-hearing de novo, that is to say it is necessary for the appeal to be decided on the evidence put before the District Court, although to some extent that can be achieved by putting in evidence material which was before the Committee (as was done in this case). There was no hearing before the Committee so there is no question of a transcript of oral evidence. The issue before me is the issue which was before the Committee, namely, should the appellants be granted licences? The appellants are seeking the grant of licences and therefore have the onus. I am not concerned with whether there was any error on the part of the Committee, or for that matter whether there was any defect in the procedure by which they arrived at their decision. Relevant Considerations [3] By s.57(1) a motor dealer’s licence shall not be granted to an applicant who: (a) is not resident in Queensland or within 65km of the boundary of Queensland; or (b) is not 21 years of age; or (c) is not a person of good fame and character; or -- 2 of 11 -- 3 (d) does not have business premises complying with the prescribed requirements (if any); or (e) is not a fit and proper person to hold such a licence. [4] Subsection (2) imposes additional requirements, that an applicant have completed to the satisfaction of the Committee a written examination as is set by the Committee (unless exempted from such examination by the Minister on the recommendation of the Committee), and have complied with such educational or other qualifications as are prescribed, unless exempted by the Committee from such qualifications. [5] There was evidence that the second appellant is resident in Queensland and is over 21 years of age, and that was not disputed. There was no direct evidence that he is of good fame and character, but there was no evidence to the contrary and such material as is available about the appellant suggests that he is of good fame and character. That aspect of the statutory qualification was not specifically disputed by the respondent. In relation to the requirement about the nature of the business premises, the situation is slightly complicated because ordinarily in an appeal by way of rehearing I apply the law as it currently is. However the Act has now been repealed, although the transitional provision in the replacement legislation, the Property Agents and Motor Dealers Act 2000 (s.623), provides that, in a case such as the present when an appeal has been commenced before the commencement of that Act, I hear and decide the appeal under the Act as if it had not been repealed. The application of the ordinary rule would mean that it would be necessary for the appellant to show that he is complying with the current requirements prescribed for such premises, but the current requirements are prescribed under the current Act not under the repealed Act. Fortunately there is no particular practical difficulty about this. There were apparently no prescribed requirements under the Act, and the appellant has business premises which comply with the requirements of the regulation under the new Act (p.64), so whatever the position may be he complies with it. [6] It is not disputed that the second appellant did pass the required examination prior to the decision of the respondent to reject his application for a licence, so the first part of the requirements of ss.(2) has been satisfied. As to the second part, there is the difficulty that there has been compliance with neither the last regulation made under the Act prior to its repeal nor the current regulation under the new Act, which prescribes fairly detailed academic and practical requirements for the grant of such a licence. Counsel for the appellants advanced the appeal on the basis that I should exempt the second appellant from those requirements (whichever were applicable), given his extensive experience as a motor dealer and in related fields. [7] Counsel for the respondent submitted that it was not open to me to approach the matter in this way, because there had been no decision by the respondent exempting the second appellant from such qualifications. His application for a licence was rejected on the basis that he was not a fit and proper person to hold a licence, and therefore the respondent did not get to the point of considering whether, if his application were otherwise satisfactory, it was appropriate to exempt him from these requirements. -- 3 of 11 -- 4 [8] The effect of s.17(3) of the Act is that I have all the powers that the Committee had prior to the repeal of the Act: Re: H (a Pharmacist) [1972] Qd.R. 402 at 407. This is not an appeal against a decision that the second appellant is not a fit and proper person, it is an appeal against the rejection of his application for a licence. In order to decide that application, it may be necessary to decide whether to exempt him from the requirement in s.57(2)(b) of the Act. That is a matter which would have been decided by the Committee in relation to a particular application for a licence, rather than separately from it. Accordingly, when considering an appeal from the decision of the respondent to reject an application for a licence, in my opinion on the true construction of the Act it is open to the court to exercise the power given to the Committee to exempt the applicant from the requirements of s.57(2)(b). In the present case I exercised that power, and exempted the appellant from those further requirements. It is convenient to deal with the reasons for that decision later. [9] As I indicated earlier, the matter substantially in dispute in the course of the appeal was whether the second appellant is a fit and proper person to hold a motor dealer’s licence. The concept of fitness and propriety is a broad one. It has been said that the very purpose of the expression is to give the widest scope for judgment and indeed for rejection, and that fitness for something involves honesty, knowledge of what is required of a person in such a position, and the ability or capacity to do what is required, in terms of physical, mental and financial capacity: Hughes & Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127 at 156-7 per Dixon CJ, McTiernan and Webb JJ. The application of such a test in this context was discussed in Sobey v Commercial Agents Board (1979) 22 SASR 70, and in Conte v Auctioneers and Agents Committee (1996) 18 QL 57. [10] For the purposes of an appeal by way of re-hearing de novo, the issue is not whether on the material before the Tribunal at that time the second appellant was a fit and proper person, but whether on the material now before me he has shown that he is now fit to hold the licence: Builders Licensing Board v Spurway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616; Re: Fredericks [1984] 1 Qd R 438; Sobey (supra) at p.76. [11] I heard the appeal on 22 May 2002. At the conclusion of the hearing I ordered that the appeal be allowed, the second appellant be granted a motor dealer’s licence, and the first appellant be granted a corporate licence. I said that I would give my reasons for that decision later. These are those reasons. Background [12] The appellant was born on 15 March 1956 in Queensland and is accordingly 46 years of age. He is and has generally been a resident in Queensland. Prior to entering the motor trade he had been studying medicine in Sydney. In 1983 he began working in the motor trade in Queensland (page 49) and obtained a motor dealer’s licence in November 1984. At the same time he obtained premises in Fortitude Valley. He held the licence until October 1994 when he surrendered it.1 Most of that time he was operating through a company Autosearch (Australia) Pty Ltd (“Autosearch”) which held a corporate licence and sold new and used prestige motor vehicles with the assistance of a finance facility from a finance company. 1 Affidavit of Relton filed 6 February 2002 paras 25-7. -- 4 of 11 -- 5 Autosearch also came to operate an airline as a separate business activity, operating in Papua New Guinea and nearby islands. [13] According to the second appellant the motor industry side of the business was successful at all times (p.24), but Autosearch ultimately went into liquidation in 1992 following financial problems experienced with the airline. 2 It had the misfortune to lose an aircraft at sea, while it was being delivered after purchase from the United States of America. Although it was insured, there was a significant financial loss associated with this event.3 At about the same time, another aircraft suffered damage while landing when a wing tip clipped a pile of soil which had been built up adjacent to the runway on an island, resulting in damage to the plane, particularly damage to its engines: p.27. Although the engines were capable of being repaired so that the plane was not a write off, the repairs took very much longer than usual, and this meant that for quite a long period the aircraft was not generating income for the company, although it was still incurring various standing costs. [14] There was some insurance to cover loss of use in the event of damage, but this operated only for 90 days, so this substantial loss was quite damaging to the business: p.27. In the context of some downturn in the airline business generally at about this time, these losses were sufficient to push the company into insolvency, and it was wound up (voluntarily). The business name was sold by the liquidator to another company, and the second appellant was employed by that company in June 1992, although he left in November 1994. That company operated from other premises, also in Fortitude Valley. [15] In January 1995 the second appellant began to work for a different company, Australian Capital Corporation Pty Ltd, which was involved in negotiating the purchase of heavy equipment for clients of that company; in effect he was acting as a purchaser’s agent for such equipment, and to some extent as a consultant to purchasers in relation to the purchase of that equipment. He also provided market appraisals and valuations of transport equipment. [16] The first appellant began trading in September 1996 and the second appellant was appointed a director of that company on 2 January 1997. The first appellant has been conducted largely as a heavy haulage consultant to other businesses, and the second appellant is employed by it as a consultant. He is involved in providing advice to the motor industry, including recommendations on purchases for various companies who are clients of the first appellant, and providing advice as to their requirements for transport equipment. The first appellant also hires out heavy transport equipment to various clients. It operates a workshop doing mechanical body work, refurbishment of heavy vehicles and some building of trailers and bodies. It has also engaged in some sales of trucks, heavy machinery and mining equipment. 2 There was some cross-examination about whether the airline should have been operated by a different company, to insulate Autosearch from its financial problems: pp 24-5. The second appellant acted on advice in relation to this matter: pp 50-1. I do not consider that this shows any want of prudence. 3 Ibid paras. 12-13. -- 5 of 11 -- 6 [17] The company’s balance sheet as at December 2001 showed net assets of over half a million dollars4 , although its assets were mostly equipment and loans to various people, particularly Eversley Property. That is described by the second appellant as a trust of which he is the sole director and shareholder, which operates a polo complex situated at Beaudesert. 5 The second appellant has a significant interest in horses and applies much of his spare time to this activity. [18] The second appellant is also interested in another company, Challenger Trucks Pty Ltd which has begun manufacturing heavy duty trucks to designs developed in Canada. These are manufactured in Brisbane using a range of subcontractors, and the second appellant through this company has obtained and is seeking various valuable contracts for the construction and supply of these machines. [19] Because of the second appellant’s interest through these companies in the sale of vehicles, principally heavy trucks, it would be convenient for his business to be dealing at the same time in such equipment second hand. He said that his competitors in the industry do this, and this is adversely affecting the profitability of his business, and business opportunities. For that he needs a motor dealer’s licence, and that is why he has sought to obtain one again. Claims on Fidelity fund: 1 [20] There were three transactions in the course of the business operations of Autosearch which led to claims being made on the fidelity fund established under Part 7 of the Act. The respondent quite properly took the view that what was relevant was the conduct of the second appellant in the circumstances giving rise to the claims, insofar as it threw light on his fitness. The first of these transactions occurred in 1989. Autosearch purchased a vehicle from Centenary Motors, which was subsequently resold in November 1989 to purchasers who obtained finance from AGC. At the time the vehicle was purchased Centenary Motors provided a statement of clear title, and searches undertaken by the second appellant, and by AGC in connection with the resale of the vehicle, did not show that there was any security interest held by anyone else. However, there was a security interest held, which was registered in South Australia. The purchasers’ financier AGC subsequently repossessed the vehicle, but at some point the other financier raised its claim for the vehicle, and as a result a claim was made by the purchasers on the fidelity fund. I assume that this was in substance a claim on behalf of the purchasers’ financer. [21] The second appellant thought it likely that someone had been making payments during this time to the other financier, but it is possible that the other financier just did not know where the vehicle was and so was not able to repossess it. Ordinarily in such circumstances the second appellant’s company would have been required to pay out the purchasers or their financier, but would have been entitled to reimbursement from the vendor. The second appellant said that at a meeting he attended in August 1990 Centenary Motors agreed to make a payment, but apparently it was not made. Presumably following the appointment of the liquidator of Autosearch in July 1992 the matter was not pursued because the liquidator did not think it worth pursuing, or lacked funds to pursue it. 4 Affidavit of Relton, Exhibit KGR1. 5 Ibid paras. 40-46. -- 6 of 11 -- 7 [22] In relation to this it was accepted that, had the appellant’s company undertaken a search in Queensland at the time of the purchase, it would not have obtained any indication of the interest of the first financier. In these circumstances the inability now to produce a search (which the second appellant said was undertaken) is of no relevance. There is no evidence that a reasonably prudent motor dealer in such circumstances would have conducted a search in other states including South Australia, or any evidence that there was any particular reason to think that the vehicle might have been registered in South Australia at some earlier time. In these circumstances, it does not seem to me that this incident taken alone reflects adversely on the second appellant. Claims on Fidelity fund: 2 and 3. [23] In March 1991 a vehicle was made available to Autosearch for sale on consignment. It was at the time subject to a security in favour of a financier. The second appellant was not aware of that, but the transaction was actually being handled by an employee who knew the owner. It was subsequently sold by that employee at a time when the second appellant was away from the office interstate, and the purchaser paid by cheque the balance of the purchase price of $80,000. Because the vehicle was sold on consignment that cheque ought to have been deposited into a trust account, with the money then being paid out to the former owner (or in this case to the financier of the former owner, with any balance going to the former owner). However the cheque was paid into the general account of the company, which at that time was overdrawn. This was done by other people in the organisation at a time when the second appellant was away, and he said that it was not in accordance with his instructions and was a mistake on their part. The company did not often deal in cars on consignment, so there may have been some lack of familiarity with the appropriate procedures in such circumstances. [24] Ordinarily this would not have mattered much; the proceeds would simply have been drawn out again from the general account and paid out, and cheques were drawn for that purpose. However because of the financial position of Autosearch at that time, the bank would not meet these cheques, and neither that company or the second appellant had the funds to repay this sum. The vendor and the vendor’s financier were ultimately paid out by claims on the fidelity fund. In the latter case the purchaser paid out the financier, and made the claim on the fund. 6 [25] Certainly this cheque ought to have been paid into the trust account, but it was not deposited to the general account by the second appellant personally, nor under his direct supervision. There is no evidence that it was anything other than a mistake on the part of the people responsible for the day to day operation of the business in his temporary absence. This is not a case where I would be justified in drawing the inference that in response to pressure from the bank he had deliberately deposited the money in his general account at that time. That this became a problem is really a consequence of the financial position of Autosearch at that time, the reason for which I have explained earlier. [26] There were also some problems with the paperwork associated with the transaction. The dealer’s statement under s.60 of the Act was signed by the second appellant’s secretary rather than by the second appellant personally. The second appellant 6 Affidavit of P. Hatton filed 22 March 2001, Exhibit PH39. -- 7 of 11 -- 8 recognised that this was wrong, and said that she had not been authorised to sign it, and said that this must have been done in his absence in Sydney. Some point was also made that there had been a breach of that section, in that the section and the statement required the dealer to provide good title to the vehicle sold when in fact the vehicle was subject to a security which was not released. It is true that the security ultimately was not released, but the intention in connection with the sale was to provide a vehicle free from any security, and therefore what was being sold was clear title. In those circumstances it seems to me that the certificate given was appropriate, although it proved to be wrong because the security was not cleared out of the purchase price (as it otherwise would have been). Since the vehicle was being sold free from the security (on the assumption, no doubt justified, that it could be freed from that security by payment to the financier out of the purchase price) it would have been inappropriate to have provided a guarantee of title subject to that security. I do not think that there is any substance to this aspect of the respondent’s criticism of the second appellant’s paperwork. [27] Another matter which was the subject of some adverse comment was that the statement to the vendor under s.61 which was provided was dated after the date of the statement to the purchaser under s.60. That suggests that the former statement was not provided at the time when the car was made available on consignment, but was provided later. That is an adverse matter but not one of any great significance in my view. [28] Overall in relation to this transaction things happened which ought not to have happened, but there was no indication of deliberate wrongdoing on the part of the second appellant, and the real difficulty arose because of the financial problems being suffered then by his company. Seen in that context, in my opinion there is nothing in relation to this transaction which shows unfitness on his part. Claims on Fidelity fund - 4 [29] The third transaction arose in somewhat unusual circumstances, but again directly from the financial problems being experienced by Autosearch. A vehicle was sold in August 1991 and delivered to the purchaser in Victoria where it was initially registered. Under the contract however the purchaser was entitled to have it registered in Queensland at the vendor’s expense, and subsequently when he brought the vehicle to Queensland he sought reimbursement for the cost of registering it here. The second appellant did not dispute that he was obliged to pay this, but by that stage the second appellant and Autosearch were not in a position to make that payment immediately, because of the financial problems to which I have referred earlier. As a result the purchaser made a claim on the fidelity fund. [30] I am not concerned in these proceedings with the question of whether that claim was properly made; it was in fact paid, but apparently at some later stage some consideration was given to taking proceedings to recover it. In any case it seems to me that this was simply a commercial debt which the second appellant’s company was not able to pay because of the financial difficulties to which I referred earlier, and was just a consequence of those difficulties. Those difficulties having arisen without any wrongdoing on the part of the second appellant, it does not seem to me that this transaction reflects adversely on him. -- 8 of 11 -- 9 [31] I can understand that the respondent would have been concerned by the fact that the second appellant was associated with four successful claims on the fidelity fund, which suggests that there has been something wrong in his method of operation. With the benefit of all of the evidence before me, however, I am satisfied that the particular circumstances giving rise to those claims do not show unfitness on the part of the second appellant. Unlicensed trading [32] Another matter raised by the respondent was that there was evidence that over a period of some time from June 1998 the appellants were engaged in motor dealing which was a breach of the legislation because they did not have licences. The second appellant in effect conceded this in his evidence, but claimed it occurred at a time when he believed that a licence was about to be issued to him. [33] In November 1997 there was an application by the second appellant for a motor dealer’s licence. In May 1998 that application was deferred on the grounds that there were some outstanding requisitions and that the second appellant had not passed the examination required under s.57(2)(a) of the Act. The second appellant considered that the matters raised by the respondent at that stage were matters that he could overcome; he subsequently sat for the examination and passed it. In July 1998 there was a further decision rejecting the application on the basis that the proposed premises were not suitable. The appellants again rectified this, and made a fresh application, and it was only in response to that application that an issue was first raised about unfitness. That occurred for the first time in the middle of 1999. [34] The second appellant said that once that issue arose he arranged for another licensed motor dealer to be made a director of the first appellant, and an application was then made for a corporate licence for the first appellant on the basis that that other motor dealer was a working director of the first appellant: p.53. However that application was refused, on the ground that the second appellant was still in control of the first appellant (which appears to be right): p.54. That rejection was therefore related to the view of the respondent as to the unfitness of the second appellant. The second appellant said that the first appellant ceased trading once that point was reached (p.50), and that appears to be consistent with the evidence. [35] There was a suggestion that there was further trading in May 2000 (which would have been some time later) but the second appellant said that that was an isolated sale of vehicles which had been part of the stock of the first appellant, not vehicles purchased for resale as a dealer: p.50. As mentioned earlier the first appellant was operating the business of hiring out heavy haulage equipment, and sale of vehicles used for that business would not I think have required a licence under the Act. Ultimately there was no real dispute as to the factual situation, and the real issue was whether this conduct was sufficiently serious in the circumstances to justify a conclusion that he was not a fit and proper person to hold a licence. [36] In relation to this, there was no suggestion that there was anything improper done in the course of that illegal trading other than the fact that he ought not to have been trading without a licence at all, or that any of the consumers or other people with whom he dealt actually suffered as a result of that illegal trading. This is consumer protection legislation, and the importance of that aspect ought not to be overlooked, but if the legislation has been breached it is more serious if that breach has led to -- 9 of 11 -- 10 harm to consumers or other people who have dealt with the appellant than if that has not been the case. [37] The other consideration which I think is of some relevance is that improper conduct is commonly dealt with by suspension of a licence or cancellation and disqualification from holding a licence for a period. Some considerable time has now passed since the application was refused, almost three years, and there has been an absence of any illegal motor dealing for at least two and a half years of that period, probably more. I would not want to encourage applicants for motor dealers licences to believe that they can commence trading before the licence is granted simply in the expectation that one will be granted in due course, without any risk of adverse consequences, but even if the licence is granted now there will have been some significant adverse consequences to the appellants in the meantime, since it is not granted retrospectively. Looked at in terms of the situation now therefore (as I am required to do for the reasons explained in Stephens) the appellants have already suffered some adverse consequences which can be set against any impropriety involved in illegal trading in anticipation of the grant of the licence. I acknowledge that this is not a question of punishing the appellants, but rather protecting the public, and it is because of the significance of that feature that I think it is if some importance that there is no suggestion that any member of the public suffered as a result of the unlicensed trading engaged in by the first appellant. [38] I note that in Rowe v. Auctioneers and Agents Committee (Appeal 5138/00, 9.11.01 unreported) I allowed a certificate of registration as a motor salesperson to a former motor dealer who had lost his licence as a result of a failure to pay money into a trust account when vehicles had been sold on consignment, and who had subsequently been convicted and fined for illegal trading, in circumstances where there had been some period where he had been without a licence, and where there was considerable frankness and co-operation with the authorities, and where he had pleaded guilty to the charge of unlicensed trading, and where there was no suggestion that any consumer had in fact suffered as a result of the unlicensed trading . [39] Individually, therefore, the various matters raised by the evidence do not, in my opinion, render the second appellant unfit to hold a licence. I have also considered their combined effect, since it would be possible for a series of matters, individually not very serious, to show unfitness by their combined effect. But I do not think that this is so in this case, at least now. In all the circumstances therefore I think that the second respondent has shown that he is now a fit and proper person to hold a motor dealer’s licence. Reasons for Exemption [40] The remaining question is whether he should be exempted from the educational and other qualifications. It is apparent from what I was told about the regulations that have been in force from time to time that the principal concern here is to ensure that a person is sufficiently familiar with the law and practice associated with motor dealing to be able to cope with the various requirements now imposed by legislation on such a person. There was some cross examination to test the appellant’s familiarity with these requirements, which showed that he had some familiarity with them although perhaps not quite as much as might have been hoped (p.21-3); perhaps the witness box was not the ideal venue for testing such a matter. -- 10 of 11 -- 11 [41] The second appellant did hold a motor dealer’s licence for a long time, and has had some indirect involvement with the trade since then, so that I would expect that he would retain a sufficient degree of familiarity with the relevant considerations, and would probably be about as familiar with them as any licensed dealer who had held the licence since 1982 and had been conducting the sort of business that the appellant has been conducting since then. I do not regard the appellant as someone who is not sufficiently familiar with his obligations that the protection of the public requires that he not be allowed to trade. To some extent his not having held a motor dealer’s licence for some time is because it took the respondent a long time to come to the conclusion that he was not a fit and proper person to hold such a licence, and because it has now taken a long time for the appeal to come on. In those circumstances I think it is appropriate to exempt him from further compliance with any of these requirements. [42] For these reasons I allowed the appeal and ordered that a motor dealer’s licence issue to the second appellant, and that a corporate licence issue to the first appellant. I was told that no other formal orders were necessary to give effect to those orders. I also ordered that the respondent pay the appellants’ costs of the appeal to be assessed. -- 11 of 11 --