Australian Securities and Investments Commission v Daws

REASONS FOR JUDGMENT 1 The applicant, the Australian Securities and Investments Commission, brings a notice of motion moving the Court for a stay order. It seeks to stay the decision of Senior Member Penglis of the Administrative Appeals Tribunal ('the Tribunal'), dated 15 March 2006 in application W2005/8, that the applicant enter into an enforceable undertaking with the respondent and that a banning order dated 2 May 2001 be revoked. The stay is sought until judgment, or discontinuance, or dismissal, or until further order. That motion is brought in reliance on s 44A of the Administrative Appeals Tribunal Act 1975 (Cth). 2 The decision of the Senior Member given on 15 March 2006 was in the following terms: '1. The reviewable decision of the respondent dated 10 December 2004 is set aside. 2. The Tribunal substitutes a decision that: (a) the respondent accept an enforceable undertaking from the applicant in the terms set forth in the Tribunal's Reasons for Decision; (b) upon the applicant's provision to the respondent of such an enforceable undertaking, the banning order made by the respondent in respect of the applicant dated 2 May 2001 shall be revoked pursuant to s 420D of the Corporations Act 2001.' 3 The reasons of the Senior Member delivered on 15 March 2006 were followed by further reasons for decision delivered on 5 April 2006, being oral reasons for decision delivered by the Senior Member on 15 February 2006. It has been submitted, and not contradicted, that on the occasion of the delivery of the oral reasons, provisional oral orders were made which were subsequently translated into the form of orders finally made on 15 March 2006. 4 The application requires reference to certain statutory provisions. The first of those are the provisions of ss 44 and 44A of the Administrative Appeals Tribunal Act, which read: '44 (1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding. … (4) The Federal Court of Australia shall hear and determine the appeal and may make such order as it thinks appropriate by reason of its decision. …' '44A (1) Subject to this section, the institution of an appeal to the Federal Court of Australia from a decision of the Tribunal does not affect the operation of the decision or prevent the taking of action to implement the decision. (2) Where an appeal is instituted in the Federal Court of Australia from a decision of the Tribunal, that Court or a Judge of that Court may make such order or orders staying or otherwise affecting the operation or implementation of either or both of the following: (a) the decision of the Tribunal or a part of that decision; and (b) the decision to which the proceeding before the Tribunal related or a part of that decision; as that Court or Judge considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal.' 5 It is appropriate also to refer to the Australian Securities and Investments Commission Act 2001 (Cth) ('the ASIC Act') and, in particular, to ss 93AA and 93A(1): '93AA (1) ASIC may accept a written undertaking given by a person in connection with a matter in relation to which ASIC has a function or power under this Act. (2) The person may withdraw or vary the undertaking at any time, but only with ASIC's consent. (3) If ASIC considers that the person who gave the undertaking has breached any of its terms, ASIC may apply to the Court for an order under subsection (4). (4) If the Court is satisfied that the person has breached a term of the undertaking, the Court may make all or any of the following orders: (a) an order directing the person to comply with that term of the undertaking; (b) an order directing the person to pay to the Commonwealth an amount up to the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach; (c) any order that the Court considers appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach; (d) any other order that the Court considers appropriate.' '93A (1) ASIC may accept a written undertaking given by the responsible entity of a registered scheme in connection with a matter: (a) concerning the registered scheme; and (b) in relation to which ASIC has a power or function under the corporations legislation (other than the excluded provisions).' 6 Additionally, reference should be made to the Corporations Act 2001 (Cth), and to Pt 7.6, in which appears Div 8, addressing banning or disqualification of persons from providing financial services. I refer particularly to ss 920D, 920E and 922A (Div 9), each of which reads as follows: '920D (1) ASIC may vary or cancel a banning order, by giving written notice to the person against whom the order was made, if ASIC is satisfied that it is appropriate to do so because of a change in any of the circumstances based on which ASIC made the order. (2) ASIC may do so: (a) on its own initiative; or (b) if the person against whom the order was made lodges with ASIC an application for ASIC to do so, which is accompanied by the documents, if any, required by regulations made for the purposes of this paragraph. (3) If ASIC proposes not to vary or cancel a banning order in accordance with an application lodged by a person under paragraph (2)(b), ASIC must give the person an opportunity: (a) to appear, or be represented, at a hearing before ASIC that takes place in private; and (b) to make submissions to ASIC on the matter.' '920E (1) A banning order, or variation or cancellation of a banning order, takes effect when it is given to the person against whom the order is or was made. (2) ASIC must publish a notice in the Gazette as soon as practicable after making, varying or cancelling a banning order. The notice must state when the action took effect and: (a) in the case of the making of a banning order - set out a copy of the banning order; or (b) in the case of the variation of a banning order - set out a copy of the banning order as varied. …' 922A (1) ASIC must establish and maintain one or more registers relating to financial services. (2) The regulations may prescribe the way in which the register or registers must be established or maintained, including the details that ASIC must enter in the register or registers in respect of the following person or bodies: (a) financial services licensees; (b) authorised representatives of financial services licensees; (c) persons against whom a banning order or disqualification order under Division 8 is made; (d) any other persons or bodies that are prescribed by regulations made for the purposes of this paragraph.' 7 The factual circumstances which provide the background to the issues now arising may be apprehended from the chronology attached to the respondent's submission in connection with this motion: '30 April 2001 Respondent entered into a consent to a banning order. 2 May 2001 Banning order made against the Respondent by ASIC. 14 July 2004 Application made by Respondent to ASIC (through Fairweather & Lemonis) pursuant to section 920D of the Corporations Act. 22 November 2004 Hearing before ASIC Delegate. 10 December 2004 Decision by ASIC Delegate not to vary or cancel the banning order ("Reviewable Decision"). 6 January 2005 Respondent files application in the AAT for review of Reviewable Decision. 14 February 2006 Hearing before Senior Member Penglis. 15 February 2006 Ex tempore reasons given by Senior Member Penglis. 1 March 2006 ASIC files submissions in respect to terms of AAT orders and enforceable undertaking. 2 March 2006 Respondent files submissions in respect to terms of AAT orders and enforceable undertaking. 15 March 2006 AAT delivers decision setting aside Reviewable Decision and substituting it with a decision that ASIC accept an undertaking from the Respondent, and upon the provision of the undertaking, the banning order be revoked. The reasons for decision dated 15 March 2006 set out the terms of the undertaking. 29 March 2006 ASIC informs Respondent's solicitors that ASIC is unable to accept undertaking because it was considering an appeal. 29 March 2006 Provision of enforceable undertaking by Respondent to ASIC. 5 April 2006 AAT's written reasons for decision, as given on 15 February 2006, provided. 11 April 2006 Commencement of appeal by ASIC together with motion for a stay. 10 May 2006 First return date for motion for stay dated 11 April 2006.'