Culley v Australian Securities and Investments Commission

REASONS FOR JUDGMENT 1 In Culley v Australian Securities and Investments Commission [2009] FCA 1208, Mr Brian Culley brought an appeal to this Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). The Administrative Appeals Tribunal ("the Tribunal") had affirmed a decision of a delegate of the respondent ("ASIC") which prohibited Mr Culley from managing a corporation for a period of two years. The delegate's decision was made under s 206F of the Corporations Act 2001 (Cth) ("the Act"). 2 Mr Culley appealed to this Court on six questions of law. The first four questions arose from matters dealt with in the Tribunal's reasons. Each was resolved adversely to Mr Culley. 3 The fifth and sixth questions asked: "(5) Whether the statutory power of disqualification contained in s 206F of the Corporations Act is subject to an implied requirement that it be exercised within a reasonable time; and (6) Whether the respondent failed to exercise its statutory power of disqualification contained in s 206F of the Corporations Act within a reasonable time". 4 Mr Culley (who had appeared for himself and his wife before the Tribunal) did not there submit that the delegate's decision should be set aside because the power of disqualification had not been exercised within a reasonable time. Despite this, ASIC did not submit that Mr Culley was prevented from raising these questions on appeal. Nor did it submit that it was prejudiced in the conduct of its case in this Court by reason of Mr Culley's failure to raise it before the Tribunal. 5 I determined that both questions five and six should be answered: "yes". 6 By the time the proceeding had come on for hearing before the Court, Mr Culley had "served" the two year period of disqualification which had been imposed by the delegate. In these circumstances I concluded my reasons (at [62]) with the observation that: "As presently advised I can see no practical purpose to be served by an order setting aside the Tribunal's decision. Nor can I discern any useful purpose to be served by remitting the matter for further hearing and determination by the Tribunal. As is evident from these reasons it is my view that the Tribunal committed no reviewable legal error in the course of dealing with the appeal as presented to it. Mr Culley has had but limited success in his appeal to this Court and then only on a point which was not agitated before the Tribunal. This may also have implications for any costs order which may be sought". 7 I invited the parties to confer and to submit agreed orders to give effect to my reasons. In the event that they were unable to agree they were directed to file and serve minutes of any orders which they contended should be made. 8 The parties were unable to agree. Mr Culley submitted that the following orders should be made: "(1) Declare that the respondent's show cause notice dated 13 October 2006 was not given by the respondent to the applicant pursuant to paragraph 206F(1)(b) of the Corporations Act 2001 within a reasonable time after the liquidator lodged his report with the respondent on 23 October 2002 about Construction Resources Pty Ltd. (2) Declare that the power given by section 206F of the Corporations Act 2001 for the respondent to prohibit the applicant from managing a corporation was not exercised within a reasonable time after the liquidator lodged his report with the respondent on 23 October 2002 about Construction Resources Pty Ltd. (3) The decision of the Administrative Appeals Tribunal made on 8 July 2008 is set aside. (4) The matter is remitted to the Administrative Appeals Tribunal to be heard and decided again without the hearing of further evidence and limited to the question whether the decision of the respondent under review should be set aside by reason of the delay of the respondent. (5) The respondent pay the applicant's costs of and incidental to the appeal". 9 ASIC submitted that the only order which should be made was an order dismissing the appeal. It submitted that there should be no order as to costs. 10 The powers of the Court on an appeal under s 44 are dealt with in subsections (4) and (5) of that section. They provide that: "(4) The Federal Court of Australia shall hear and determine the appeal and may make such orders that it thinks appropriate by reason of its decision. (5) Without limiting by implication the generality of subsection (4), the orders that may be made by the Federal Court of Australia on an appeal include an order affirming or setting aside the decision of the Tribunal and an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the Court". 11 These powers must be read in context. They are not as expansive as might at first appear. In Minister for Immigration and Ethnic Affairs v Gungor (1982) 63 FLR 441 at 454 Sheppard J said that: "It is in my opinion not correct to say that this court is by these provisions given wide powers to make such order as it thinks fit. Implicit in its power are a number of restrictions. The appeal is expressly limited to error of law, which alleged error is the sole matter before the court and is the only subject matter of any order made consequent on the appeal. The order which this court can make after hearing the appeal is also similarly restricted to an order which is appropriate by reason of its decision. It follows that the only order which can be properly made is one the propriety of which is circumscribed by and necessary to reflect this court's view on the alleged or found error of law. To go further I would see as amounting to exceeding the jurisdiction of this court under this section. A power to make "such order as it thinks appropriate by reason of its decision" is much more restrictive than a power "to make such order as it sees fit" or a power "to make a decision in substitution for the decision" the subject of the appeal. Section 44(5) confirms, though it states that it does not purport to limit, this as an appropriate reading of the power in s. 44(4) when it limits its statement of the express power of the court when setting aside a decision to the making of an order remitting the case to be heard again. Having set aside a decision, it has no express power to substitute what it sees as the correct decision unless such is the appropriate order by reason of its decision on the point of law in the context of the particular proceedings…". 12 It is not disputed that the "reasonable time" point could have been taken before the Tribunal. Had it been, the Tribunal would have been in a position to find the facts which are set out in my earlier judgment at [43]-[52] and determined whether, as a matter of law, ASIC had failed to comply with the implied obligation contained in s 206F of the Act and what, if any, consequences should follow. The Tribunal did not consider the point and make any findings because Mr Culley did not raise it. 13 In Federal Commissioner of Taxation v Raptis (1989) 20 ATR 1262 at 1267 Gummow J said that: "[t]here must be some difficulty … in finding an "error of law" in the failure in the tribunal to make a finding first urged in this court". His Honour's observation was referred to with approval by the Full Court in Secretary, Department of Social Security v Cooper (1990) 26 FCR 13 at 18. 14 A distinction has been drawn, in the authorities, between findings which the Tribunal is bound to make for the purposes of a particular case and those which it is not required to make. In the former case a question of law may be found to arise notwithstanding the failure of the parties to raise the issue before the Tribunal and the failure of the Tribunal to deal with it. Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 54 FLR 334 was such a case. There Bowen CJ said (at 343) that: "In my opinion a party is not necessarily precluded by the conduct of his case before the Tribunal from arguing on "appeal" matters conceded below. If he is successful then the decision of the Tribunal may be overturned - found in some way to be wrong in law, even though that error may have been substantially contributed to by the conduct of the case by the party in question. In other words, the conduct of the party's case before the Tribunal goes to this Court's discretion to what course it will take given that there has been an error rather than to the question as to whether the Tribunal really made an error. The case before this Court is not merely one of parties agreeing upon what facts should be decided by the trier of fact, nor a case of facts, peculiarly within the knowledge of the party, being conceded. Rather, there was a clear statutory precondition upon which the Tribunal had to be satisfied and enough material and evidence before it to raise the issue independently of the parties' submissions. In these circumstances it was an error of law not to consider and decide the issue of immigrant status. Whether or not that error should lead to the decision of the Tribunal being set aside and the matter remitted to it depends in my view upon principles similar to those expressed by Dixon J in Burston's case and by the same judge in Orr v Holmes (1948) 76 CLR 632, at p 640 "to fulfil an imperative demand of justice…". 15 In Kuswardana the Tribunal had to make a determination as to whether or not the applicant before it was an 'immigrant' because the application of the statutory provisions which the Tribunal was applying depended on an answer to that question. 16 On the other hand, cases such as Raptis and Cooper support the proposition that a "failure of a Tribunal to make a finding of fact, or to deal with the materiality of a found fact, when it has not been required to do so by the party seeking to "appeal" on that point, will mean that no question of law can be relied upon to ground the appeal": Ferriday v Repatriation Commission (1996) 69 FCR 521 at 528 (per Lee J). See also Federal Commissioner of Taxation v Glennan (1999) 90 FCR 538 at 556-8 where the Full Court concluded (at 558) that: "It follows from what we have said that we do not see the problem facing the taxpayer as simply being that he has sought in this Court to raise fresh arguments not put to the AAT. It is not simply a matter of whether the AAT would have found in favour of the taxpayer had the arguments been put and whether raising those arguments before the Court creates "prejudice" to the Commissioner. The issue in the present case is, in the context of the relevant provisions of the [Taxation Administration Act 1953 (Cth)], whether the AAT erred in law by not addressing the arguments now sought to be raised … In our view, it did not". See also Hussain v Minister for Foreign Affairs (2008) 169 FCR 241 at 255-256. 17 These authorities were not referred to by counsel either at the original hearing or on the hearing conducted to hear submissions as to what orders should be made. They call into question the efficacy of ASIC's failure to oppose the raising of questions of law (5) and (6) and the determination that the questions should be answered in the affirmative. 18 Having discovered these authorities I invited submissions from the parties as to their bearing on the orders which I should make. Both parties sought and were granted leave to file written submissions. In those submissions they continued to seek the orders which I have set out above at [8] and [9] (save for an immaterial addition to order 5 sought by Mr Culley). 19 Mr Culley's argument on appeal depended on the existence of an implied requirement that ASIC's powers under s 206F must be exercised within a reasonable time and that they had not been exercised within such time. These were not matters which the Tribunal was bound to take into account independently of the parties' submissions. It would have been necessary for the Tribunal to find the facts relating to the time taken by ASIC to investigate the matter and issue the show cause notice and the reasons for the delay. None of this occurred. 20 In the circumstances I do not consider that any challenge to the exercise of ASIC's powers under s 206F could give rise to a question of law that is amenable to resolution by the Court under s 44(1) of the AAT Act. The Tribunal committed no error of law in failing to deal with an issue that was not raised before it. The present was not a case in which the Tribunal had material before it which would have enabled it to find, independently of any submissions by the parties, that some statutory precondition to the exercise of its powers was lacking. It was not invited to give consideration to the temporal aspects of the way in which ASIC dealt with the matter. Nor was it urged to make a finding that delay had precluded ASIC from making the impugned decision. Questions five and six did not, therefore, constitute questions of law which should have been considered by the Court. 21 The proceeding should be dismissed. 22 ASIC does not seek any order for the payment of its costs. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.