Australian Prudential Regulation Authority v Holloway

REASONS FOR JUDGMENT SPENDER J: 1 This is an application for an extension of time within which to appeal from a judgment of Mansfield J which was given on 6 September 2000. An extension of time is required because a notice of appeal was not filed or served within the time limited by O 52 r 15 of the Federal Court Rules. Order 52 r 15(1) provides: "The notice of appeal shall be filed and served: (a) within 21 days after: (i) the date when the judgment appealed from was pronounced; (ii) the date when leave to appeal was granted; or (iii) any later date fixed for that purpose by the court appealed from; or (b) within such further time as is allowed by the Court or a Judge upon application made by motion upon notice filed within the period of 21 days referred to in the last preceding paragraph." Rule 15(2) provides: "Notwithstanding anything in the preceding subrule, the Court or a Judge for special reasons may at any time give leave to file and serve a notice of appeal." 2 In this particular case, the application was made on 10 April 2001 in respect, as I said, of the orders made by Mansfield J on 6 September 2000. Having regard to the period of 21 days referred to in O 52 r 15(1), that means there has been a delay of six and a half months in the filing of the notice of appeal. 3 The material before this court sets out the grounds on which an appeal would be argued should an extension of time be granted. The requirements of O 52 r 15(2) of the Federal Court Rules was considered by a Full Court in Jess v Scott (1986) 12 FCR 187. There the court said at 195: "It should not be overlooked that r 15(2) enables leave to be given 'at any time'; the 'special reasons' relevant to such a power cannot but describe an elastic test, suitable for application across a range of situations, from an oversight of a day to a neglect persisted in during a prolonged period. It would require something very persuasive indeed to justify a grant of leave after, for example, a year; equally, it may be said, something much less significant might justify leave where a party is a few days late. 'Special reasons' must be understood in a sense capable of accommodating both types of situation. It is an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served." 4 As those observations make plain, there are two aspects that a court considering the grant of an extension of time should consider. The first is whether the reasons the applicant has advanced for his delay is sufficient to excuse or at least explain the delay so as to justify allowing him to institute an appeal out of time. The second is whether the applicant for an extension of time has demonstrated that the appeal he proposes to bring has sufficient prospects of success to make it just that he should be allowed to proceed with it. 5 As to the first of those aspects, the material put before the court by Mr Holloway is sparse. Mr Holloway simply says that he was unable to prosecute his appeal. He says: "Continued and continuing action by the Australian Prudential Regulation Authority deprived me of the necessary funds to pursue an appeal in this matter." and he also says that the advice that he received from those legal representatives acting for him initially in the matter was that he had no basis for appeal. 6 We have not been given the benefit of any detail as to what assets Mr Holloway has. We are faced with the bald assertion that he lacked funds to prosecute his appeal and that the advice given by his former legal representatives was that he had no prospects of success. This first aspect of the matter really has not been given the attention by the applicant as really a case for an extension of time of a delay of six and a half months really requires. It is difficult to see how those two circumstances are sufficient to excuse or explain the delay such as to justify allowing him to institute an appeal out of time. On that aspect of the matter, it has to be said I have serious reservations whether special reasons have been shown. 7 But, turning to the second aspect of the matter, it seems that a consideration of what Mr Holloway would seek to argue on the appeal leads to the inevitable conclusion that the prospects of success are such as, in my view, to tell against the grant of an extension of time. 8 It was submitted, amongst other grounds, that APRA lacked the authority to institute the proceedings which led to the orders made by Mansfield J. The fact of the matter, however, is that s 197 of the Superannuation Industry (Supervision) Act 1993 (Cth) (the Act) relevantly provides that: "(1) An application for a civil penalty order may only be made by APRA or a person to whom APRA has delegated the power to make applications for civil penalty orders." 9 It should also be noted that s 85 prohibits avoidance schemes, and subs (2) of s 85 provides: "Subsection (1) is a civil penalty provision as defined by section 193, and Part 21 therefore provides for civil and criminal consequences of contravening, or being involved in a contravention, of that subsection" and, more directly, s 194 of the Act provides: "For the purposes of this Part, a person who is involved in a contravention of a particular provision of this Act is taken to have contravened that provision." 10 If in fact it is demonstrated that Mr Holloway was involved in the schemes the subject of the proceedings, then it seems plain that the circumstance that the trustees were not themselves prosecuted for carrying out a scheme or being involved in the carrying out of a scheme is not a relevant matter. 11 It was also suggested that since no ministerial consent as provided for by s 264(6) was given in relation to these proceedings, it follows that the proceedings were fatally tainted. Section 263 permits a regulator to give written notice to a trustee, telling the trustee that the regulator proposes to conduct an investigation of the whole or part of the affairs of the entity. Those notices were given. No ministerial consent is required for the giving of the notices of investigation. Subsection (2) of 263 provides: "If a notice is given under subsection (1) to the trustee of a superannuation entity, the following provisions of this Division apply in relation to the entity." 12 Section 264 states that if a regulator acts to preserve the values or interests, he can do one of a number of things, referred to later in s 264. He can direct a trustee or investment manager by a notice to give written information about matters relating to the affairs of the entity. He can direct the trustee or manager not to dispose or remove the assets of the entity and he can also direct other persons, which direction has the effect of freezing the assets of the entity. 13 It is in respect of those matters and those matters only under s 264 that the written consent of the Minister has to be obtained and there is no evidence to say that the conduct requiring the written consent of the minister was conduct relevant involved in these proceedings. It is not the case, as submitted by counsel for the applicant, that any investigation under s 263 requires written consent under s 264(6) of the Act. 14 There were other submissions directed to the reach of s 85 of the Act, to the definition contained in s 19 of the Act, and to the observations by the High Court in the Attorney‑General for the Commonwealth v Breckler (1999) 197 CLR 83. It is sufficient in my view to say that there is nothing in those grounds which incline me to the view that there are the prospects of success which would make it just that Mr Holloway be permitted to pursue them. In my view this is a clear case where the court ought to refuse an extension of time within which to appeal. DRUMMOND J: 15 I agree with the reasons given by the learned presiding judge and with the order he proposes. CARR J: 16 I agree for the reasons given by Spender J that this application should be dismissed with costs. SPENDER J: 17 The order of the court is that the application for an extension of time is dismissed with costs. We will not consider indemnity costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Spender, Drummond and Carr.