Birdseye v Australian Securities and Investments Commission

Federal Court of Australia (Full Court)|2003-10-21|Before: As Bowen CJ, Deane J, Stone JJ

The applicant's contentions 47 Counsel for Mr Birdseye, Mr Wells QC, submitted to the effect that the discretion of the AAT had miscarried by it failing to take into account relevant considerations. Those considerations were said to be: · that an extension of time would not be futile or lead to unacceptable uncertainty; · that there was merit in the proposed application for review; · ASIC deprived Mr Birdseye of his right to request a statement in writing of its reasons for its decision to apply to the Board, (this last consideration was addressed briefly in written submissions but not pressed orally). 48 Mr Wells also took issue with that part of the AAT's reasons for decision, in which the AAT referred to Mr Birdseye being represented by counsel until 'the hearing of the appeal to the Full Federal Court which was decided on 19 March 2002'. It was common ground that the word 'Full' should not have appeared in that sentence of the AAT's reasons. Mr Wells contended that the AAT seemed to suggest that the proceedings to challenge the Board's decision had concluded in March 2002 rather than September 2002, leaving an unexplained delay of six months by Mr Birdseye. Further Mr Wells reiterated that Mr Birdseye was not represented before the Full Court. However, he conceded that the principal concerns of the AAT was a desire for finality. 49 Mr Wells submitted that the AAT did not take into account that the Board was able to revoke its decision if it could be shown that the decision of ASIC to apply to it was wrongly made. Mr Wells contended that the power of the Board to revoke its decision was derived from a proper construction of s 33 of the Acts Interpretation Act 1901 (Cth). In particular, Mr Wells referred to s 33(3) which provides that: 'Where an Act confers a power to make, grant or issue any instrument (including rules, regulations or by-laws) the power shall, unless the contrary intention appears, be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.' It is notable that s 33(1) provides that: 'Where an Act confers a power or imposes a duty, then, unless the contrary intention appears, the power may be exercised and the duty shall be performed from time to time as occasion requires.' (emphasis supplied) 50 Mr Wells conceded that there is nothing in the Corporations Act 2001 (Cth) that expressly permits the Board to revoke a decision but contended that such a power is implied by s 33 of the Acts Interpretation Act. Mr Wells further conceded that Mr Birdseye was able to apply for re-registration now, based on the changed circumstance that Mr Birdseye is no longer an undischarged bankrupt. Mr Wells refined his submission in the course of argument to the following: · The AAT made an error of law in the exercise of its discretion by assuming that the Board's decision was not recoverable even if ASIC's decision to apply to the Board is set aside. That submission, in turn, was based on the proposition that under s 1296 of the Corporations Law (as it then stood) the Board issued an instrument (within the meaning of the Acts Interpretation Act) when it made its decision.

The respondent's contentions 51 Ms Francas, counsel for ASIC, submitted that the Corporations Act disclosed a contrary intention for the purposes of s 33 of the Acts Interpretation Act. In her written outline of submissions at [41], Ms Francas said: 'The nature of the powers being exercised by the Board are such that it would make the regulatory regime unworkable if the Board could simply change its decision …' 52 Ms Francas also submitted that there was no duty in the AAT to consider the merits of the Board's decision in exercising its discretion to extend time.

Consideration - extension of time 53 The decision of the AAT to refuse to extend time was a discretionary decision which will not be overturned unless it is demonstrated that in exercising its discretion the AAT: · acted on a wrong principle; · allowed irrelevant matters to guide it; · mistook the facts; or · did not take into account some material consideration. See House v The King (1936) 55 CLR 499 at 504-505, Norbis v Norbis (1986) 161 CLR 513 at 520 and In the matter of National Roads and Motorists' Association Ltd [2003] FCAFC 206 at [21] to [23] per Ryan and Gyles JJ. 54 In my view the AAT did not err in the exercise of its discretion in refusing to extend time to appeal. I hold that view for reasons which follow. 55 I reject Mr Wells' contention that the ability of the Board to revoke its decision was a material or relevant consideration which the AAT did not take into account. In my view s 33(3) of the Acts Interpretation Act does not apply because the Corporation Law, as it then stood, evinced a contrary intention. 56 Under Div 3 of Pt 9.2 of the Corporations Law, the Board was given specific powers to: (a) terminate a suspension of an auditor under s 1292(1); and (b) under s 1297(2), suspend the operation of an order cancelling or suspending registration. The existence of those powers tends against an intention that the Board be able to revoke a decision to cancel the registration of an auditor, especially in circumstances where it is not in dispute that an auditor is able to re-apply for registration despite the earlier cancellation decision; see Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11, (2002) 209 CLR 597 at [8] ff per Gleeson CJ. 57 The instant case, unlike Bhardwaj, is not one where the initial decision of the decision maker was without legal foundation. The decision of the Board was legally effected and withstood challenge all the way to a Full Court of this Court; compare Bhardwaj at [53] per Gaudron and Gummow JJ. The AAT did not err in considering that it would be wrong to unsettle the finality which had been achieved to that point in the Board's decision. As Gleeson CJ said in Bhardwaj at [8]: 'The requirements of good administration, and the need for people affected directly or indirectly by decisions to know where they stand, mean that finality is a powerful consideration.' 58 I further do not consider that the AAT erred by not considering the merits of the appeal in determining not to extend time. It will be a rare case where an administrative review tribunal examines the merits of an application in considering whether to extend time, unless the merits obviously disclose that the case sought to be put is either powerful or untenable. Further, it will be rare for a review tribunal to examine the merits in detail when the point of the exercise in considering whether or not to extend time is to determine whether the merits need be considered. 59 I am unable to discern how it is relevant to whether or not ASIC's decision to apply to the Board should be reviewed, to consider whether Mr Birdseye was in some way deprived of his ability to seek reasons for the decision. Finally, I consider that no error of principle is disclosed by the AAT's inadvertent reference to the word 'Full' when describing the Court for the purposes of the judgment given by Hill J.

Power to review 60 Having regard to my views on the attack on the AAT's exercise of discretion, it is unnecessary to consider the contentions of ASIC that the AAT lacked the power to review ASIC's decision to apply to the Board.

Notice of Appeal 61 I have read in draft form, since preparing these reasons for judgment, the reasons for judgment of Branson and Stone JJ. I agree with what their Honours have said concerning the deficiencies in the applicant's notice of appeal and I also agree that the notice of appeal in the instant matter does not, with precision, identify a question or questions of law.

Order 62 I would order that the application be dismissed, with costs. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate: Dated: 21 October 2003 Counsel for the Applicant: Mr J Wells QC

Solicitor for the Respondent: Australian Securities & Investments Commission

introduction 1 This proceeding is brought in reliance on s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'). Section 44 authorises a party to a proceeding before the Administrative Appeals Tribunal ('the Tribunal') to appeal to this Court 'on a question of law' from any decision of the Tribunal in that proceeding. As Bowen CJ and Deane J observed in Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 581: 'The proceedings are not an appeal in the strict sense in that they lie within the original jurisdiction of the court. It is, however, convenient to adopt the nomenclature of the Act and to refer to them as an appeal.' 2 The decision of the Tribunal that founds the present appeal is a decision given by Deputy President Forgie. The learned Deputy President refused the applicant an extension of time within which to apply for review of a decision of the respondent. The decision of the respondent to which the application for an extension of time related was a decision to make an application to the Companies Auditors and Liquidators Disciplinary Board ('the Board') for an order cancelling the registration of the applicant as an auditor. 3 The jurisdiction of the Court under s 44 of the AAT Act has been exercised in this case by the Court constituted as a Full Court because the relevant decision was given by a presidential member of the Tribunal and the Chief Justice, after consulting the President of the Tribunal, considered that this was the appropriate course (s 44(3)(b) of the AAT Act). 4 At the time of the applicant's application to the Tribunal for an extension of time within which to apply for review of the respondent's decision, the respondent's application to the Board had been heard and determined. The Board had by order cancelled the applicant's registration as an auditor. Further the decision of the Board to cancel the applicant's registration as an auditor had been affirmed by the Tribunal (Re Birdseye and Companies, Auditors and Liquidators Disciplinary Board [2001] AATA 783; 39 ACSR 414); an appeal against the decision of the Tribunal had been dismissed by the Federal Court constituted by Hill J (Birdseye v Companies Auditors and Liquidators Disciplinary Board [2002] FCA 280; 20 ACLC 805) and an appeal against the decision of Hill J had been dismissed by the Full Court of the Federal Court (Birdseye v Companies Auditors and Liquidators Disciplinary Board [2002] FCAFC 284).

7 An amended notice of appeal was foreshadowed but an application for leave to file it was not pursued. A 'further amended notice of appeal' ('the notice of appeal') was filed pursuant to leave to amend the notice of appeal granted by this Court during the hearing of the appeal. It purports to identify the following questions of law: '2.1. Whether the considerations referred to in paragraph 3.1 below were relevant to the exercise of the Tribunal's discretion under s.29 (7) of the AAT Act. 2.2. Whether the Board's decision would remain in force and remain unchallengeable even if the respondent's decision were set aside. 2.3. Whether the finding of the Tribunal referred to in paragraph 3.3 below lacked any supporting evidence.' 8 The grounds specified in the notice of appeal are as follows: '3.1. The learned Deputy President erred in law in that she failed to take into account the following relevant considerations: 3.1.1. That the application would not be futile or productive of unacceptable uncertainty. Particulars The learned Deputy President held (at [65]) that to disturb the respondent Commission's decision after the Board had validly acted upon it would leave the Board's decision operative, even if uncertain in its authority. The learned Deputy President ought to have held that the Board has power to revoke its decision to cancel the appellant's registration, and setting aside the respondent Commission's decision would provide a ground for doing so. 3.1.2. That there was merit in the proposed Application for Review. Particulars The learned Deputy President accepted (at[60]) that the merits of the substantial application were properly to be taken into account, but failed to give any consideration to the merits, beyond a recital of some relevant facts at [18] - [23]. 3.1.3. That the respondent Commission had failed to comply with the requirements of s.1317D(2), Corporations Law (then in force), thereby depriving the appellant of his right to request a statement in writing of the matters referred to in s.28(1), AAT Act, and to apply for a review of the respondent Commission's decision within the prescribed time. 3.2. Further, or in the alternative to 3.1.1. above, the learned Deputy President erred in law in concluding that, as the Board's decision would remain in force even if the respondent Commission's decision were set aside, there was no effective purpose served by the proposed Application for Review. The learned Deputy President ought to have held that the Board has power to revoke its decision to cancel the appellant's registration, and setting aside the respondent Commission's decision would provide a ground for doing so. Further, or alternatively, the learned Deputy President ought to have held that the appellant would not be estopped or precluded from seeking an extension of time to apply to the AAT for a second review of the Board's original decision, following a setting aside of the respondent Commission's decision. 3.3. The learned Deputy President made a finding for which there was no evidence. Particulars The learned Deputy President found (at [64]) that the appellant "was legally represented up to and including the hearing of the appeal to the Full Federal Court which was decided on 19 March 2002". The learned Deputy President ought to have found (on the undisputed evidence) that the appellant was unrepresented before the Full Court (hearing: 21.08.02; decision: 10.09.02) and was legally represented only before the AAT (decision 27.08.01) and at the hearing before Hill J. (18.02.02).' 9 Although the respondent has raised no objection to the notice of appeal, it does not, in our view, comply with the requirements of O 53 r 3 of the Federal Court Rules. The requirements of O 53 r 3 of the Federal Court Rules can only be understood in the context provided by s 44(1) of the AAT Act. 10 Section 44(1) of the AAT Act provides: '(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.' 11 Gummow J observed in TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 at 178: 'Section 44 of the AAT Act is expressed in narrower terms than the old s 196 of the Tax Act. This provided for appeals from the Board of Review which "involved" a question of law. The result was that if some question of law was involved, the whole of the decision of the Board was open to review, not merely the question of law … This no longer will be the case with appeals brought to this court under s 44 of the AAT Act. The existence of a question of law is now not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself ….' (citations omitted) 12 Order 53 of the Federal Court Rules regulates the practice and procedure to be followed in respect to appeals from the Tribunal. Order 53 rule 3(2), (3) and (4) provide: '(2) The notice of appeal shall be signed by the applicant or his solicitor and shall state - (a) the decision of the Tribunal from which the appeal is brought, the members constituting the Tribunal and the date when the decision was made; (b) the question or questions of law to be raised on the appeal; (c) the order sought; and (d) briefly, but specifically, the grounds relied upon in support of the order sought. (3) The Court may on such terms and conditions as the Court thinks fit, allow a notice of appeal to be amended. (4) On the hearing of an appeal, the applicant shall not, without the leave of the Court, raise any question of law or rely on any ground in support of the order sought other than those stated in the notice of appeal.' 13 In Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 524 Ryan J said: 'I do not regard it as legitimate to call in aid the grounds supplied in purported compliance with O 53, r 3(2)(d) to read down the questions stated as required by paragraph (b) to what are truly questions of law. Because the appeal under s 44 of the AAT Act is confined to a question of law it would be inappropriate for the Rules to specify as part of the contents of a notice of appeal "grounds" which would be appropriate if the appeal could be brought against findings of fact as well as against what are said to be errors of law; cp O 52, r 13(2)(b) which requires a notice of appeal of that wider kind to state "briefly, but specifically, the grounds relied upon in support of the appeal". The distinction is recognized by O 53, r 3(2)(d) which requires the notice of appeal under the AAT Act to state only "the grounds relied upon in support of the order sought". In the present case the order sought is that "the Decision of the Tribunal be set aside". Grounds in support of that order would properly assume the resolution of the question of law in favour of the applicant and indicate in a summary way the reasons why that resolution requires the decision of the AAT to be set aside. Of necessity, properly drawn grounds of that kind could not elucidate the question of law.' 14 His Honour went on at 524 to indicate his view that merely to assert that the Tribunal had erred in law in making a particular finding was not to state a question of law. 15 Further, his Honour at 527 expressed the view that: '… it simply begs the question of law to commence it with the words "Whether the Tribunal erred in law." If the question, properly analysed, is not a question of law no amount of formulary like "erred in law" or "was open as a matter of law" can make it into a question of law.' 16 We express our respectful agreement with the above observations of Gummow and Ryan JJ respectively. 17 A number of well known authorities has considered the distinction between a question of law and a question of fact (see, for example, Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 (FC); Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389). However, very limited consideration has been given to how a question of law ought properly to be stated in a notice of appeal from a decision of the Tribunal having regard to the requirements imposed by O 53 r 3(2). Those requirements include that the questions of law raised by the appeal are to be stated separately from the grounds relied upon in support of the order sought on the appeal. 18 In our view, O 53 r 3(2) discloses an intention that a question of law to be raised on an appeal from the Tribunal should be stated with precision as a pure question of law. It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal. It is not necessary in this case to give consideration to questions such as whether an allegation of denial of natural justice can give rise to a question of law so as to found an appeal under s 44(1) of the AAT Act (see Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 esp per Gray ACJ and North J at [3]-[8] and Gyles J at [58]-[67]) and if it can, how the question of law should be stated. 19 The question set out at par 2.1 of the notice of appeal seeks a ruling by the Court on whether particular considerations were relevant to the exercise of the Tribunal's discretion under s 29(7) of the AAT Act. The discretion vested in the Tribunal by s 29(7) is expressed in general terms; upon an application being made in writing, the Tribunal may extend the time for making an application for review. A discretion conferred in such terms is unconfined '… except in so far as there may be found in the subject‑matter, scope and purpose of the statute some implied limitation on the factors to which the decision‑maker may legitimately have regard ….' (Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 per Mason J at 40). 20 A ruling by the Court that the considerations referred to in par 3.1 of the notice of appeal were relevant to the exercise of the Tribunal's discretion under s 29(7) of the AAT Act (as they almost certainly were in the sense that the Tribunal would not have acted unlawfully if it had taken them into account) would not support an order setting aside the decision of the Tribunal. Nothing in s 29(7) or elsewhere imposes upon the Tribunal a duty to consider every relevant consideration before making a decision under the section. 21 Bearing in mind that the questions of law stated in a notice of appeal are the subject matter of the appeal brought under s 44 of the AAT Act, it seems to me that par 2.1 of the notice of appeal would have to be reframed in terms such as the following before it could provide the basis for an appeal: Whether on the proper construction of s 29(7) of the AAT Act the Tribunal, in determining whether to extend the time for the making of an application for review of a decision of the Australian Securities and Investments Commission ("ASIC") to apply to the Board for the revocation of a person's registration as an auditor, is bound to take into account: (a) whether the application would be futile or productive of unacceptable uncertainty having regard to the power that the Board has (as the applicant contends) to revoke its decision to cancel the applicant's registration as an auditor; (b) whether the application had merit; and (c) whether ASIC had failed to comply with the requirements of s 1317D(2) of the Corporations Law. 22 Assuming the above question to have been the only question on the appeal, the ground relied upon in support of the claimed order quashing the decision of the Tribunal and remitting the matter to the Tribunal for determination according to law would appropriately have been expressed in terms such as: The decision of the Tribunal should be set aside as the Tribunal exercised the discretion vested in it by s 29(7) of the AAT Act without taking into account considerations that it was bound to take into account. 23 However, Mr Wells QC, counsel for Mr Birdseye, understandably did not contend that, on the proper construction of s 29(7) of the AAT Act, the Tribunal was bound to take into account all or any of the considerations referred to in par 3.1 of the notice of appeal. Nor did Mr Wells contend that anything in the Corporations Law bound the Tribunal to take those considerations, or any of them, into account. It can thus be seen that, when critically examined, par 2.1 of the notice of appeal does not state a question of law capable of supporting an appeal from the decision of the Tribunal. An answer to the question stated in par 2.1 favourable to the applicant would not reveal any error affecting the decision of the Tribunal. 24 The precise question of law intended to be stated by par 2.2 of the notice of appeal is unclear. Neither party contended that the validity of the order of the Board cancelling the applicant's registration as an auditor would be directly affected if the decision of the respondent to apply for the order were set aside. The applicant contended, however, that if the decision of the respondent to apply for the order were set aside, the Board might exercise a power to revoke its order cancelling the applicant's registration as an auditor. The applicant placed reliance on s 33(3) of the Acts Interpretation Act 1901 (Cth) in contending that the Board had the power to revoke its order. 25 At best the question stated at par 2.2 of the notice of appeal would seem to be a question of mixed fact and law inviting:

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