Bittmann v Australian Securities and Investments Commission

BACKGROUND 1 The background to this matter is set out in the judgment of Jessup J in Bittmann v Australian Securities & Investments Commission [2006] FCA 1532 ('Bittmann v ASIC'). For clarity here, some elements of the procedural history are worth setting out again. 2 The applicant appeals from a decision of the Administrative Appeals Tribunal ('the Tribunal') given on 21 August 2006. The nature of the applicant's complaint is set out in the decision of the Tribunal at [1]-[2]: "Mr Bittmann was the secretary and director of Antal Air Pty Ltd (Antal Air). He complained to the respondent about the manner in which controllers and liquidators of an unsecured creditor of Antal Air discharged their functions. In letters to Mr Bittmann dated 22 September 2003, 14 June 2004 and 14 June 2006 the respondent stated that it did not intend to take any action on his complaint. Mr Bittmann sought review of the decisions on the basis that Part 5.3A of the Corporations Act 2001 (the Corporations Act) deals with voluntary administration and should be applied to all controllers and liquidators." The Tribunal determined (at [8]) that the respondent's decisions to take no action in relation to the applicant's complaint did not come within the scope of s 244 of the Australian Securities and Investments Commission Act 2001 (Cth) ('ASIC Act') and were not reviewable by the Tribunal under that provision. The Tribunal decided that it did not have jurisdiction to determine the application that the applicant sought to make, because it was unable to identify any other statutory basis permitting it to review the decisions that the applicant attributed to the respondent. 3 The applicant appeals from the Tribunal's decision that it does not have jurisdiction to review the respondent's decisions that are the subject of the applicant's complaint. Appeals to this Court from the Tribunal can only be brought on questions of law: see s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('AAT Act'). 4 The applicant's notice of appeal filed on 4 September 2006 states: "1. The appellant appeals from the whole of the decision of the Tribunal (G.D. Friedman, Senior member of the Administrative Appeals Tribunal No. V2006/566) given on 21st August 2006. GROUNDS 2. The grounds for the appeal are based on the following. 3. The respondent, ASIC is a body corporate and their officers made a commercial decision not to support the Corporation Act's objective contained in Part 5.3A, Section 435A. 4. The application for review was based on Section 1317B(1) (a), (b) and (c). (2) For the purposes of this Act and the Administrative Appeals Tribunal Act 1975, ASIC is taken to be a person whose interests are affected by a decision made under this Act by the Companies Auditors and Liquidators Disciplinary Board. 5. The Directors of ASIC have used their position in defeating creditors and shareholders of companies that they control. 6. By virtue of point 3, 4 and 5, I ask the Court to re-affirm the Administrative Appeals Tribunal's jurisdiction to review decisions granted under the Act, Part 9.4A. 7. I ask the Court to grant leave to make application pursuant to Section 1317 (1) (a). 8. Such further or other orders as the Honourable Court deems appropriate." 5 The applicant has also provided to the Court a document that sets out the orders that he seeks. Amongst others, he seeks orders in the following terms: "ASIC/Liquidators have used their position to defeat creditors, employees and shareholders from the companies that they control. ASIC/Liquidators do not have judicial powers in S 536. That power is conferred to the Court. (ASIC's submission to the Tribunal on 21 August 2006 was misconceived re S 536.) The applicant have leave to make application to the Administrative Appeals Tribunal pursuant to S 1317E(1) to demonstrate contravention of the Act." 6 By way of motion, notice of which was given on 10 October 2006, the respondent sought to have the notice of appeal struck out. The matter came before me for directions on 12 October 2006. On that date, I ordered (amongst other things) that the respondent's motion be adjourned for hearing to 13 November 2006 and that the respondent file and serve a short outline of submissions. Jessup J kindly heard the motion on that date, as I was engaged in another hearing. 7 In written submissions filed prior to the hearing before Jessup J, the respondent referred to s 44 of the AAT Act. The respondent noted that a question of law must arise from the decision of the Tribunal from which the applicant appeals and that O 53 r 3(2) of the Federal Court Rules ('the Rules')requires that the question of law be set out in the notice of appeal. Additionally, the notice of appeal must set out the orders sought and the grounds relied upon in support of the orders. The notice of appeal filed by the applicant, so the respondent said, did not state a question of law and contained irrelevant assertions and argument. 8 On 13 November 2006, counsel for the respondent sought to rely on O 9 r 7 of the Rules in support of the strike out motion. In so doing, counsel relied on a decision of Ryan J in Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 ('Lambroglou'): see Bittmann v ASIC at [11]. As Jessup J noted subsequently, Lambroglou did not assist the respondent on the application of O 9 r 7, which, as his Honour noted, is directed towards setting aside originating process in circumstances where there is some procedural deficiency or irregularity: see Bittmann v ASIC at [11]-[12]. Here, the respondent does not point to any procedural defect in the notice of appeal. Instead, it seeks to have the notice of appeal struck out on the ground that it fails to identify a question of law that might form the subject of the appeal. In the result, Jessup J ordered that the respondent's motion be dismissed, but that the respondent have leave to make further application in relation to the applicant's notice of appeal: see Bittmann v ASIC at [13]. 9 Pursuant to the orders made by Jessup J on 17 November 2006, the respondent has brought a further motion, notice of which was given on 28 November 2006, which seeks to have the notice of appeal struck out pursuant to O 20 r 2 of the Rules, alternatively O 53 r 15, alternatively s 23 of the Federal Court of Australia Act 1976 (Cth) ('Federal Court Act'). 10 At the hearing yesterday, counsel for the respondent reiterated the submission that the applicant's notice of appeal was fundamentally defective because it failed to state a question of law. I accept the respondent's submissions as to the deficiency of the notice of appeal. The notice of appeal does not state any question of law that is to be the subject of appeal. 11 The requirement that a notice of an appeal from the Tribunal state a question of law has been considered in numerous cases. As Gummow J pointed out in TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 at 178, "[t]he existence of a question of law is now not merely a qualifying condition to ground the appeal, but also the subject of the appeal itself." Order 53 r 3(2) of the Rules requires that the question of law to be raised by the appeal and the grounds relied on in support of the order sought on the appeal be stated separately: compare Birdseye v Australian Securities and Investments Commission (2003) 38 AAR 55 at 60 per Branson and Stone JJ, with whom Marshall J relevantly agreed at 67; Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 133 FCR 290 at 300-301 per Branson J; and Ergon Energy Corp Ltd v Commissioner of Taxation (2006) 153 FCR 551 at 563-565 per Sundberg and Kenny JJ and 570-571 per Gyles J (dissenting). 12 I also accept that, as the respondent submitted, the Court may make the orders that it seeks by way of its motion. In McGregor v Chief Executive Officer of Centrelink [2000] FCA 701 at [17], Spender J expressed the view that there was power under O 20 r 2 of the Rules to dismiss an appeal purportedly under s 44 of the AAT Act on the basis that it stated no question of law and thus disclosed no reasonable cause of action: see also Zoia v Administrative Appeals Tribunal [2003] FCA 303 at [6] per Carr J and Barghouthi v ING Custodians Pty Ltd [2003] FCA 1272 at [15] per Allsop J. In Lambroglou, Ryan J expressed the view (at 519) that O 53 r 15(1) of the Rules conferred a power sufficiently broad to allow the Court to strike out the whole or part of an appeal under s 44 of the AAT Act. Whatever the correct analysis of the Rules, s 23 of the Federal Court Act confers broad power on the Court to make orders of such kinds as it thinks appropriate. I accept that, pursuant to s 23, the Court has power to strike out a notice of appeal in reliance on s 44 where the notice does not state a question of law: compare also Lambroglou at 519-520. 13 Amongst other things, the applicant submitted yesterday that, because of O 35 r 4(2) of the Rules, the respondent had only 14 days in which to serve its new notice of motion; and that it had run out of time when it served the notice on 6 December 2006. The applicant asserted that this is a proper basis for dismissing the motion. I reject this claim. The orders made by Jessup J on 17 November 2006 did not require the respondent to do any act; and O 35 r 4(2) has no present application. His Honour merely granted leave to the respondent "to make such further application in relation to the Notice of Appeal as it may be advised". There can be no valid objection to the respondent's present motion, notice of which was filed on 28 November 2006. 14 The applicant asserted that there were other deficiencies in the respondent's preparation of its motion, including the lack of supporting affidavit, which he said deprived him of the opportunity to answer the respondent's strike out motion. I reject these submissions; and, in particular, I note that the respondent previously explained the basis for its first strike out motion in written submissions, which took the place of a supporting affidavit. It is immaterial that there is another motion now on foot, as this second motion seeks the same relief; and, indeed, the respondent again relies on these same written submissions. Further, I observe that the applicant has attended court on two prior occasions, when the respondent explained the basis for its application to strike out the notice of appeal. 15 Although the applicant has already had sufficient opportunity to amend his notice of appeal to state a question of law and has not done so (see Bittmann v ASIC at [4] and [8]-[10]), I did at one stage of the hearing entertain the possibility that he might yet be granted further leave to amend. This was because, in discussion with the applicant, it emerged that the question he unsuccessfully sought to raise was a jurisdictional one: namely, whether or not the jurisdiction of the Tribunal to review the decisions that he challenged was properly located in s 1317B of the Corporations Act 2001 (Cth) ('Corporations Act'). The applicant submitted that the Tribunal had wrongly accepted the respondent's submission that it had acted under s 11(4) of the ASIC Act in making its decisions that it did not intend to take any action on the applicant's complaints. The applicant apparently accepted that the Tribunal could not review an exercise of power under s 11(4). If amended properly, the applicant's notice of appeal could support an appeal on a question of law. 16 The respondent opposed the grant of further leave, however, substantially because the appeal, if amended to raise the jurisdictional question, was manifestly hopeless. The respondent submitted that before s 1317B of the Corporations Act could apply, there must be "a decision made under [the Corporations Act]" and that the applicant had identified no such decision. 17 The applicant submitted that the respondent's submission should not be accepted because he had raised a question concerning the applicability of Pt 5.3A of the Corporations Act. The case that he sought to make to ASIC (and to the Tribunal and to this Court) was that Pt 5.3A applied to all receiverships and other external administrations, which included the receiver and manager of a company or companies in which he had an interest and about which he also made complaint. The respondent had rejected the applicant's submissions concerning the applicability of Pt 5.3A and stated that there was no basis for regulatory intervention. No question presently arises as to the merits of either party's position in this regard. The only matter that presently falls for consideration is whether the applicant has identified a decision made under the Corporations Act that would support an application to the Tribunal under s 1317B. As I said to the applicant at the hearing yesterday, at most he has identified a decision made about the scope of Part 5.3A, as well as the need or lack of need for regulatory intervention. He has not identified a decision made under the Corporations Act, as he must do, in order to attract s 1317B. That is, it is not his case that the decisions that he attributes to the respondent were made under the Corporations Act in the sense that they were made in exercise of a power conferred by that Act. Yesterday (as it seems on earlier occasions) the applicant specifically stated that he did not rely on s 536 of the Corporations Act. 18 I am compelled to accept the respondent's submission that, even if the applicant were granted further leave to amend his notice of appeal, the question of law that he would seek to raise is bound to be determined against him. I would not therefore make the grant of further leave. 19 I mention, lest it be thought I had overlooked the matter, that the applicant supplied the Court with further material this morning prior to my delivering judgment, including a short written submission and copy letters. Assuming (without deciding) that I may have regard to this material, it would not lead me to reach a different conclusion. Whatever the merits of the applicant's complaints, the Tribunal could not consider them unless it had jurisdiction to do so; and it would not have jurisdiction under s 1317B if the decision the subject of application was not a decision under the Corporations Act. Nothing in the Tribunal's decision or in the material that the applicant presents to the Court raises the possibility that the application to the Tribunal was made in respect of a decision under the Corporations Act. 20 The notice of appeal is plainly defective. Accordingly, I would order that the appeal be struck out. costs 21 The Court has a broad discretion to award costs under s 43 of the Federal Court Act although this discretion must be exercised judicially. The usual order is that a successful party will have its costs paid on a party and party basis by the unsuccessful party. Costs have been reserved at least twice in this proceeding (that is, on 12 October 2006 and 17 November 2006). These costs were largely attributable to the respondent's first motion, notice of which was dated 10 October 2006. Since the respondent failed on that motion, it would in the ordinary course be liable to pay the applicant's costs. Having regard to the applicant's self-represented status, however, these costs are likely to be negligible or slight. The respondent has succeeded on the motion heard yesterday. Bearing in mind the procedural history of this matter, the most appropriate course is, in my view, to order that the applicant pay the respondent's costs of the hearing on 20 December 2006 fixed in the amount of $1,200, which is the figure that the respondent's counsel nominated upon my inquiry. Save for this, I would order that each party bear its own costs, including reserved costs. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.