Dimitropoulos and Australian Securities and Investments Commission (Taxation) [2017] AATA 1513 (19 September 2017)

Corporations Act 2001 ss 760A, 760A-769C, 761A, 763A, 766A-766D, 910A-1022C, 911A, 911C, 912A, 912B, 912D, 913B, 915B, 915C, 915F, 915G, 916A, 916F, 917A-917F, 920A, 920B, 920D, 920E, 920F, 921A, 922A, 922B, 923A, 941A, 941B, 941C, 941F, 944A-946C, 947C, 961-961E, 961G, 961J, 961M, 1294, 1311

National Consumer Credit Protection Act 2009 ss 5, 8, 9, 27-110, 29, 30, 31, 37, 45, 47, 48, 53, 54, 55, 59, 60, 61, 64, 71, 72, 75-78, 80, 81, 83, 84, 85, 213, 214, 255, 289

National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 sch 2 cl 6

National Consumer Credit Protection Regulations 2010 reg 25, sch 3 cll 3.2, 3.4

Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130

Levi v Companies Auditors and Liquidators Disciplinary Board (2013) 61 AAR 82; [2013] FCA 719

Liu and Australian Securities and Investments Commission [2013] AATA 117

O'Sullivan v Australian Securities and Investments Commission [2015] AATA 265

Re Commonwealth and Quirke [1986] AATA 57; (1986) 9 ALD 92

Re Dart v Director-General of Social Services (1982) 4 ALD 553

Re Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority [1993] AATA 274; (1993) 31 ALD 380

Re Jeffers and Australian Securities and Investments Commission [2015] AATA 537

Re Mclean and Australian Securities and Investments Commission [2016] AATA 22

Re Scott and Australian Securities and Investments Commission [2009] AATA 798; (2009) 51 AAR 114

Re Snook and Civil Aviation Safety Authority [2008] AATA 861; (2008) 109 ALD 122

Secretary, Department of Social Services and McNamara [2016] AATA 189

1. Mr Dimitropoulos' review applications concern two decisions ASIC made on 23 June 2017 - following a 5 December 2016 notice of ASIC's concerns, and a 5 May 2017 hearing. The two ASIC decisions were:-
   • (a) the financial services decision:- an order under ss 920A(1) & 920B(1) & (2) of the Corporations Act 2001 ("CorpAct") permanently banning Mr Dimitropoulos from providing any financial services
   • (b) the credit decision:- an order under ss 80(1) & 81(1) & (2) of the National Consumer Credit Protection Act 2009 ("CredAct") permanently banning Mr Dimitropoulos from engaging in any credit activities.

1. Mr Dimitropoulos seeks orders staying the operation of both decisions. He also seeks orders directed at ensuring the confidentiality of the review process and hearing.
2. Mr Dimitropoulos advanced five grounds to support his stay and confidentiality applications. Allowing for a degree of overlap, they can be summarised as involving the following three propositions:-
   • (a) he has good prospects of being able to contradict ASIC's material findings
   • (b) he would suffer significant personal detriment, both financial and more particularly reputational, unless the orders were stayed
   • (c) the public interest would be adequately served by a stay - because he would undertake to preserve the current state of affairs, and not provide financial services, or engage in any credit activities, until the final determination of his review applications.
3. The specific orders that Mr Dimitropoulos sought in relation to the confidentiality of the review proceedings were that:-
   • (a) a pseudonym be used to refer to him
   • (b) any publication of his actual identity be restricted to the parties, their representatives, and to the Tribunal members and staff
   • (c) any publication of the evidence in the proceedings, and information provided to the Tribunal be similarly restricted
   • (d) the review proceedings take place in private and that attendance at the hearing be similarly restricted to those persons and any witnesses in the proceedings.
4. In his application for those orders the grounds Mr Dimitropoulos relied on were common to those advanced to support the stay application. In later written submissions Mr Dimitropoulos accepted that apprehended reputational damage would generally not provide a sufficient reason for the kind and extent of the confidentiality orders he sought. But he contended that, in his particular circumstances the potential reputational consequences of publicity in relation to the review proceedings were likely to be severely disadvantageous to him.

1. Both of ASIC's decisions concerned the character of Mr Dimitropoulos' conduct, in the period from about mid-2009 to "at least" mid-2013, in relation to the following corporate entities:-
   • (a) Sunpac:- Mr Dimitropoulos incorporated Sunpac in about 1998. He was at all material times its sole director, secretary and shareholder. Sunpac operated as an intermediary involved in submitting loan applications to financial institutions. Although the currently available evidence (to the extent that it is practical and appropriate to address) is not particularly clear, Sunpac seems to have had few staff members. There were a couple of "business development officers" (one of whom, at least until about 2010, appears to have been a Mr Taba), a receptionist and one loan writer. Sunpac obtained an Australian credit licence in February 2011. Mr Dimitropoulos claimed (although ASIC's decision reasons refrained from accepting) that Sunpac had not participated in any loan arrangements since some time in 2012. It appears to be uncontroversial that, at the end of June 2013, Mr Dimitropoulos resigned as a director, and sold his interest in Sunpac. (Sunpac appears to have subsequently changed its name to Viana Lawyers Pty Ltd.)
   • (b) Heritage Financial Services ("HFS"):- This was an entity controlled by a man named Parisi, who was a property developer and long standing family and business associate of Mr Dimitropoulos. HFS operated from office premises at Thornleigh that it shared with Sunpac, Heritage FSA and Vegeta. Since about 2000 Mr Dimitropoulos had provided "services" to Mr Parisi, including the negotiation of "land options and other transactions". Mr Dimitropoulos acknowledged that he had business cards of "Heritage Financial Solutions" in his own name. He appears to have portrayed himself as some kind of agent, or representative, of HFS. "Heritage FSA" (see below) paid HFS for "leads" - ie., the referral of land purchasers who were seeking finance. ASIC's decision reasons noted that Mr Dimitropoulos had received regular significant payments from entities associated with Mr Parisi.
   • (c) Fast Loans Australia Pty Ltd ("Fast Loans"):- This was another corporation controlled by Mr Parisi. It appears to have had arrangements with both land development companies he controlled, and with Vegeta Pty Ltd. Fast Loans was credit registered, under the 2009 transitional legislation, but had not applied for a credit licence prior to January 2011. As an unlicensed entity engaged in credit activity it contravened the prohibition in clause 6(1) of Schedule 2 to the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009. The ASIC reasons record (although, elliptically and without informative detail) that Fast Loans also contravened CredAct s 289 from 1 August 2010.)
   • (d) Vegeta Pty Ltd ("Vegeta"):- Incorporated in March 2006 its sole director and shareholder was Mr Taba (the Sunpac employee referred to above). Mr Taba's acknowledged principal background was in real estate marketing. Vegeta's role was a financier that provided "top up" finance to "Heritage" clients. It did so pursuant to an arrangement with Fast Loans. Under that arrangement Fast Loans facilitated borrowings from Parisi controlled land development companies, and carried out Vegeta's lender functions. Vegeta's arrangement with Fast Loans was said to constitute a "servicing agreement" and, as such, it would have provided Vegeta with a basis for exemption from the requirement to hold a credit licence:- see National Consumer Credit Protection Regulations 2010 reg 25C and Schedule 3 cll 3.2 & 3.4. But that exemption required the other party to the servicing agreement to have been either licensed or registered. ASIC's decision reasons made no specific findings as to whether or not Vegeta was actually exempt from the requirement to hold a licence. Mr Taba told ASIC that Vegeta paid Mr Dimitropoulos $4,000 per week in relation to "other business dealings" with Mr Parisi and Mr Dimitropoulos' father.
   • (e) "Heritage FSA":- This was an entity that Mr Taba incorporated, with an unspecified amount of financial assistance from Mr Dimtropoulos, in February 2010. He was the company's sole shareholder and director. According to Mr Dimitropoulos' statement to ASIC, between February 2010 and August 2011, Heritage FSA referred loan application business to Sunpac. In July 2011 Heritage FSA obtained an Australian credit licence and became a party to the arrangements between Fast Loans and Vegeta relating to "top up" loans. Mr Taba described Heritage FSA as having "taken over" HFS's clients, and having, at any one time, about 5 to 6 "independent contractors" who worked as "fact finders" or "in home property consultants". ASIC's credit decision reasons describe it as an entity that "sold real estate to clients" and, until at least March 2015, "arranged loans on behalf of its clients". Those loan arrangements were undertaken by the same person who had been Sunpac's "loan writer". Mr Taba claimed that this loan writer was (at least until about September 2012) the only one of Heritage FSA's personnel who was actually involved in providing loan advice to clients. (ASIC's decision reasons record that Heritage operated under the following sequence of names:- Heritage Financial Solutions Australia Pty Ltd; Heritage - Freedom & Security Pty Ltd, Freedom & Security Finance Pty Ltd and David Parry Finance Pty Ltd (in liquidation).)
2. ASIC's decision reasons implicitly acknowledge some imprecision about the entities that carried on the "Heritage" business. That imprecision is evident in (i) the similarity in the names of HFS, and Heritage FSA, (ii) the description of Heritage FSA as having carried on business prior to its February 2010 incorporation, (iii) the reference to Mr Dimitropoulos having some kind of role as a representative of HFS, and (iv) specific findings that Heritage FSA had continued Sunpac's business. ASIC's, slightly different, descriptions of that business in the two decision reasons statements reveal findings that the Heritage FSA business involved the following elements:-
   • (a) unsolicited approaches to prospective clients about using their superannuation funds to buy property
   • (b) obtaining details of individual clients' financial position
   • (c) recommending to particular clients that they take steps to
     • (i) set up a self managed superannuation fund ("SMSF")
     • (ii) roll existing superannuation monies into the client's SMSF
     • (iii) enter into purchase contracts for house and land packages
     • (iv) borrow funds to finance the purchase contracts.
   • (d) assisting clients with loan applications and contracts to purchase land. (Those contracts typically, but not exclusively, involved vendor entities controlled by Mr Parisi.)
3. Another aspect of ASIC's decision reasons involved the activities of Vegeta and the Parisi related companies (particularly Fast Loans) in providing "top up" finance to purchasers of land who were Sunpac and "Heritage" clients. The arrangements for these transactions was alluded to, but not clearly described in ASIC's decision reasons. According to brief details included in Mr Taba's 4 May 2017 statement, they apparently involved vendors (typically development companies associated with Mr Parisi) agreeing to complete land sale transactions without actually receiving payment of the "top up" loan amount. Fast Loans provided notional funding to Vegeta, and Vegeta entered into loan agreements with purchasers. (Mr Taba asserted that those loan agreement documents were provided by "Heritage".) But completion of the sales contracts occurred without any actual flow of funds between Fast Loans, Vegeta, the purchaser and the vendor. Instead, vendors took a debt assignment from Vegeta. Ultimate payment of the top-up amount to the vendor would depend on later re-financing (or sale) by the purchaser.

1. ASIC's credit decision can be regarded as having made three main findings - involving (i) misrepresentations about Sunpac's credit legislation compliance, (ii) involvement in Sunpac's non-compliance with aspects of its general conduct obligations, and (iii) conduct providing a reason to believe in the likelihood of future non-compliance with credit legislation.
2. The first of ASIC's findings was that Mr Dimitropoulos had made materially misleading statements in Sunpac's 2012 and 2013 annual compliance certificates, and had thereby contravened CredAct s 255. Those findings were significantly based on Sunpac's production of blank (or template) documents in response to ASIC's March 2013 and March 2015 notices requiring the production of documents demonstrating Sunpac's compliance with the conduct obligations under CredAct s 47.
3. Mr Dimitropoulos contested the reliance ASIC had placed on his production of blank documents in response to the 2013 and 2015 notices. His contention was that Sunpac's actual compliance (i) should be evaluated against the background of an understanding of the size and nature of its business, and (ii) was demonstrated by the contents of other documents he had produced - including (a) client assessment "checklists" and (b) a Compliance Manual. But ASIC's reasons indicate that it considered these documents were inadequate - because (a) the cryptically completed assessment checklist was no more than an assertion, and provided no evidence of the required underlying conduct, and (b) whilst the Compliance Manual described appropriate policies and practices, there was no evidence to substantiate Sunpac's actual compliance with them. In particular, ASIC considered that Sunpac had not provided any evidence to demonstrate either that (i) clients had been provided with advice about credit alternatives, or (ii) had received appropriate advice about conflicts of interest.
4. In relation to the second category of its findings, and notwithstanding the findings about the Annual Compliance Certificates, ASIC's credit decision reasons accepted that Sunpac had complied with its obligations in some respects. Referring to the various general conduct obligations imposed by CredAct s 47, ASIC regarded Sunpac ("given [its] size ... and the training evidenced") as having complied with the following requirements:-
   • (a) s 47(e):- to take reasonable steps to ensure that its representatives complied with the credit legislation
   • (b) s 47(f):- to maintain the competence to engage in the credit activities authorised by the licence
   • (c) s 47(g):- to ensure that its representatives were adequately trained, and were competent, to engage in the credit activities authorised by the licence
   • (d) s 47(i):- to be a member of an approved external dispute resolution scheme
   • (e) s 47(j) - to have complying client compensation arrangements in place
   • (f) s 47(k) - to have adequate arrangements and systems to ensure compliance with its obligations, and a written plan documenting those arrangements and systems.
5. However, ASIC found that Sunpac had not complied with the following CredAct s 47 requirements:-
   • (a) s 47(a):- to do all things necessary to ensure that the credit activities authorised by the licence were engaged in efficiently, honestly and fairly
   • (b) s 47(b):- to have in place adequate arrangements to ensure that clients of the licensee were not disadvantaged by any conflict of interest that might arise in relation to credit activities engaged in by the licensee or its representatives
   • (c) s 47(c):- to comply with the conditions on the licence
   • (d) s 47(d):- to comply with the credit legislation
   • (e) s 47(h):- to have in place an approved internal dispute resolution procedure
   • (f) s 47(l):- to have available adequate resources to engage in the credit activities authorised by the licence
   • (g) s 47(m):- to comply with other obligations prescribed by the regulations.
6. Some of these findings, as expressed in the written reasons, lack specificity and appear to be in the nature of evaluative conclusions rather than specific primary findings about factual aspects of Sunpac's conduct. That is so in relation to the breaches of CredAct s 47(c), (d) & (m). It is also appropriate to note that ASIC's finding of non-compliance with the CredAct s 47(l) requirement appears difficult to reconcile with the findings of compliance with CredAct s 47(e), (f), (g) & (k) - unless it is also regarded as essentially duplicating the findings of non-compliance with CredAct s 47(a) & (b).
7. The particular basis for ASIC's finding of non-compliance with CredAct s 47(a) & (b) was the absence of evidence that Sunpac clients were appropriately advised about alternative credit products and conflicts of interest. ASIC's concern about those matters was apparently suggested by the opacity of the arrangements under which Mr Dimitropoulos received payments from both Vegeta and the Parisi related entities. ASIC's dissatisfaction that Sunpac had adequately addressed those matters also drove an alternative finding that ASIC had reason to believe that Mr Dimitropoulos was likely to contravene credit legislation. ASIC regarded the evidence as revealing the fact, but not the precise nature, of Mr Dimitropoulos' "significant relationships", with other entities associated with Sunpac's business activities. ASIC's reasons considered that the opacity of those relationships, and their non-disclosure to Sunpac's employees, demonstrated at least Mr Dimitropoulos' lack of understanding of the credit legislation obligations and, perhaps more likely, his disregard of them.

ASIC'S "CREDIT ACTIVITY" FINDINGS - HERITAGE FSA

1. In relation to Heritage FSA, in addition to its finding that the entity had continued Sunpac's business, ASIC appears to have accepted evidence that Mr Dimitropoulos set Heritage's strategic direction, called and controlled staff meetings, hired, trained and terminated staff, and was an integral part of Heritage's business operations.
2. ASIC also found that, from July 2010 to the end of June 2011 Heritage had engaged in credit activity without being registered. ASIC considered that Mr Dimitropoulos' "integral" role in Heritage FSA's operations required the conclusion that he had been knowingly involved in that unlicensed credit activity.
3. In relation to the standard of Heritage FSA's credit activity, ASIC found that Heritage FSA (like Sunpac) had failed to comply with the general conduct obligations under CredAct s 47(a), (b) & (c). ASIC's findings about those contraventions drew significantly on the company's response to notices it had served in February and October 2013. Those notices had sought production of the documentary records of Heritage FSA's actions directed at compliance with its general conduct obligations. Heritage FSA had responded to the February 2013 notice by producing two undated documents. ASIC's reasons dismissed these documents as "aspirational" rather than evidence of Heritage FSA's actual processes and practices. Heritage FSA's response to the October 2013 ASIC notice involved nine documents that had apparently been created since the February 2013 notice. These included (i) a Compliance Manual, (ii) a Consultants Compliance Training Manual, (iii) a Compliance Review Report, and (iv) various policy documents relating to fair work practices, conflict of interest, anti-money laundering, monitoring and supervision and archiving processes.
4. ASIC regarded the documents produced in response to the October 2013 notice as insufficient to demonstrate Heritage's required compliance. They were insufficient because they did not provide evidence of actual activities in relation to such fundamental matters as (i) the distribution of the various compliance manuals, (ii) the training of Heritage's representatives, or (iii) compliance by representatives with the requirements of the various manuals and policies. Most particularly, apparently underlying ASIC's dissatisfaction were concerns that (i) Heritage FSA clients were not appropriately advised about either (i) alternative credit products, or (ii) conflicts of interest.
5. ASIC's decision reasons recorded that, apparently since its first response to the October 2013 notice, Heritage FSA had provided a "Compliance Review Report" by a well known firm of solicitors. The report concluded that Heritage's various registers were "in exemplary order". ASIC's decision reasons were non-committal about the weight that could properly be attached to that report. Instead they considered that, at least up until late 2013, Heritage's compliance documentation was "worryingly scant". More significantly, ASIC attached considerable weight to various statements from Heritage FSA's former employees and clients. Those statements led ASIC to conclude that Heritage FSA conducted its business without:-
   • (a) appropriate care and accuracy in relation to clients' loan application details
   • (b) providing clients with credit guides or statements of advice
   • (c) due regard to the particular client's financial circumstances, particularly in relation to the "top up" loans
   • (d) adequate advice to clients about their ongoing SMSF compliance obligations
   • (e) adequate disclosure of Heritage's fees and costs, or the arrangements and relationships underlying the "top up" loans
   • (f) maintaining a clear distinction between the various entities involved in the client transactions.
6. ASIC made other findings about Heritage FSA's non-compliance with its general conduct obligations. These related to CredAct s 47(e), (f), (g) and (h):- see paragraphs 11 & 12 above. However, three of those matters involve obligations with which ASIC accepted Sunpac had complied (see paragraph 12 above) and it is not clear from ASIC's reasons statement whether the findings in relation to those matters were confined to the period before October 2013 (ie., the time of Heritage FSA's further documentary response to ASIC).

1. ASIC's financial services decision concerned the character of Mr Dimitropoulos' conduct in relation to the "Heritage" business conducted from about mid-2009, and having the characteristics outlined earlier in these reasons:- see paragraph 7 above. ASIC considered that the business involved providing "financial product advice" - having regard to the relevant statutory definitions of "financial product" and "financial product advice":- see CorpAct ss 761A, 763A(1), 766A(1). The business was, therefore, a "financial services business" whose lawful conduct required (at least) Heritage FSA to have held either (i) an Australian financial services licence ("AFS licence"), or (ii) an authority from such a licensee:- see CorpAct ss 911A(1), 913B & 1311. Heritage FSA never held such a licence. The only authority Heritage FSA ever held (between May 2010 and December 2012) was limited to providing administrative and clerical services, and did not extend to "financial product advice".
2. Heritage FSA did have some association with a qualified financial planner (a Mr Pote) who held a relevant authorisation from an AFS licensee, and was at least available to provide advice to Heritage FSA's clients. ASIC's decision reasons specifically rejected claims that Heritage FSA's association with Mr Pote (having regard to CorpAct s 911A(2)(k)) had the effect of exempting Heritage from any AFS licence requirement. ASIC also rejected claims that Heritage FSA had conducted its business so as to ensure that (i) the conduct of its representatives was limited to eliciting the interest of potential clients, and (ii) all financial product advice was given by an appropriately authorised third party.
3. ASIC's findings about Mr Dimitropoulos' personal involvement in, and responsibility for, the shortcomings in Heritage FSA's activities were to the effect that Mr Dimitropoulos:-
   • (a) held a controlling management position in Heritage FSA - see paragraphs 16 & 17 above
   • (b) had investigated whether Heritage FSA required a financial services licence for its activities
   • (c) had provided training to Heritage FSA about ASIC's Regulatory Guide 146 "Licensing: Training of financial product advisers" - and was likely to have been well aware of both the relevant licensing requirements, and of the fact that Heritage FSA did not hold such a licence
   • (d) was relevantly and directly responsible for "a complete disregard for the law in the businesses of Sunpac and Heritage"
   • (e) was knowingly involved in Heritage FSA's CorpAct contraventions.
4. As an apparent alternative to its findings about Mr Dimitropoulos' personal responsibility for Heritage FSA's relevant contraventions, ASIC considered that his conduct provided reason to believe that he was likely to contravene a financial services law. This finding was based on ASIC's scepticism of Mr Dimitropoulos' claim to have provided various "unpaid" services to Heritage FSA, and its view that Mr Dimitropoulos had displayed a lack of integrity and professionalism in relation to his receipt of regular and substantial payments from Vegeta and interests associated with Mr Parisi. ASIC considered that Mr Dimitropoulos had not disclosed the fact and nature of those payments to the Heritage representatives who dealt with its clients, and that he had at least failed to recognise that his relationship with Vegeta and the Parisi companies gave rise to a potential conflict of interest. It was that absence of disclosure, and apparent lack of appreciation of the significance of the underlying conflict, that resulted in ASIC's conclusion that it had reason to believe Mr Dimitropoulos was likely to contravene a financial services law.

1. Mr Dimitropoulos challenges the correctness of ASIC's decisions. In relation to the credit decision he contends that ASIC:-
   • (a) in making findings about the nature and extent of his role in the business of Heritage FSA, incorrectly preferred statements from Heritage's former sales consultants to his own evidence, and that of Mr Taba (amongst others)
   • (b) misapplied the definition of "involved in" in CredAct s 5
   • (c) unfairly relied on CredAct s 47(1)(d), (l) and (m) - because he had not been given any prior notice
   • (d) in making its various findings of non-compliance with other aspects of the general conduct obligations in CredAct s 47, had proceeded on the impermissible basis that Mr Dimitropoulos had not negatived its concerns about possible non-compliance.
2. In relation to the financial services decision Mr Dimitropoulos contends that ASIC incorrectly found:-
   • (a) that Heritage FSA provided "financial services" in contravention of the CorpAct licensing requirement
   • (b) that he held a controlling management position in Heritage, and was consequently "involved in" Heritage FSA's CorpAct contraventions
   • (c) that he had a conflict of interest he had not properly addressed, and that this provided a basis for satisfaction that he was likely to contravene a financial services law
   • (d) that he had engaged in a pattern of persistent contraventions which indicated a systemic failure and a general lack of understanding of, and regard for, compliance with financial services legislation.
3. In challenging ASIC's finding that he had a controlling management position in Heritage FSA, Mr Dimitropoulos again complained that ASIC had incorrectly preferred the statements of discredited former Heritage sales consultants to his own evidence (and that of Mr Taba).

1. The Tribunal has the power to make orders "staying or otherwise affecting the operation or implementation" of a reviewable decision, to the extent that it considers appropriate, "for the purpose of securing the effectiveness of the hearing and determination of the application for review":- Administrative Appeals Tribunal Act 1975 ("AAT Act") s 41(2). The power permits the Tribunal to impose conditions upon, and to determine the period of any stay:- AAT Act s 41(6). Exercise of the discretionary power is preconditioned on (i) regard to "the interests of any persons who may be affected by the review", and (ii) satisfaction that proposed orders are "desirable".
2. The determinative criteria for the exercise of the Tribunal's stay power - satisfaction about the desirability and appropriateness of the proposed orders "for the purpose of securing the effectiveness of the hearing and determination of the application for review" - are opaquely expressed. All three are general expressions that confound exhaustive description of either the permissible scope of the orders or the relevant considerations. In relation to the scope of the orders, the Tribunal may restrict a decision maker's ordinary practices, or compliance with other statutory obligations in relation to publication of the reviewable decision:- see Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130 at [71] & [81]. In relation to the permissibly relevant considerations, various decisions (see eg. Re Scott and Australian Securities and Investments Commission [2009] AATA 798; (2009) 51 AAR 114; Levi v Companies Auditors and Liquidators Disciplinary Board [2013] FCA 719 at [14]- [15]; Secretary, Department of Social Services and McNamara [2016] AATA 189) justify a confident conclusion that they include:-
   • (a) an applicant's prospects of success, in obtaining a materially different outcome as a result of the review proceeding
   • (b) the functions and responsibilities of the statutory decision maker, the nature and purpose of the reviewable decision, and the public interest in relation to it
   • (c) the reasons proffered to support, or oppose, the stay application, and the potential practical consequences of any stay
   • (d) the practical consequences of the decision under review (to the parties and to any interested persons), unless its operation is the subject of a relevant stay, after taking into account:-
     • (i) conditions that might be imposed as a term of any stay
     • (ii) the timing of the reviewable decision, the application, and any likely review hearing
     • (iii) the ability of the applicant to pursue the review proceedings effectively
     • (iv) the likely practical utility of any favourable review outcome.

CREDIT ACT - PROVISIONS RELEVANT TO CREDIT ACTIVITIES

1. The criteria of desirability and appropriateness require the Tribunal to have regard to the functions and powers of a decision maker in relation to the stay application. That regard necessitates consideration of the statutory scheme under which the reviewable decision was made:- see Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130 at [51]- [54] and [56]-[57] per Downes and Jagot JJ.
2. Chapter 2 (ss 27 to 110) of the National Consumer Credit Protection Act 2009 ("CredAct") contains the statutory scheme relevant to ASIC's 23 June 2017 credit decision. The scheme features of principal present relevance include the following:-
   • (a) the requirement for persons involved in "credit activity" - (a term that includes the provision of either credit or "credit services") to hold an Australian credit licence ("ACL") granted by ASIC:- see CredAct ss 29 & 37
   • (b) the expansive definition of "credit services" to include activities involving suggesting, or providing assistance relating to, credit contracts, credit limits or consumer leases:- see CredAct ss 8 & 9
   • (c) prohibitions on (i) conducting credit activity business with an unlicensed person, and (ii) false claims to have an entitlement to provide financial services:- see CredAct ss 30 & 31
   • (d) the requirement of an ACL licensee to (i) "do all things necessary to ensure" the efficient, honest and fair provision of their credit activities, (ii) have in place "adequate arrangements" to avoid client disadvantage from any conflicts of interest, (iii) comply with "credit legislation", (iv) comply with their ACL conditions (conditions that typically include ensuring the competence, training and individual assessment, of anyone who provides credit services on the licensee's behalf), and (v) have in place adequate arrangement to compensate clients for any obligation breach:- see CredAct ss 47 & 48
   • (e) the requirement of a licensee who appoints a person (a "credit representative") to provide credit activities on their behalf, to:-
     • (i) provide an appropriate written authority:- see CredAct s 64(1)
     • (ii) specify the credit activity the person is authorised to provide:- see CredAct ss 64(1)
     • (iii) formally notify ASIC of the appointment, its revocation or alteration:- see eg CredAct ss 71 & 72
     • (iv) take reasonable steps to ensure that its representatives comply with the credit legislation:- see CredAct s 47(1)(e)
     • (v) ensure that its representatives are competent, and adequately trained, to provide their authorised credit activities:- see CredAct s 47(1)(g)
   • (f) the general joint and several liability of licensees and representatives, and the potential joint and several liability of licensees for the conduct of their common "representatives":- see CredAct ss 75 - 78
   • (g) the obligation to provide ASIC with an annual compliance certificate in an approved form:- see CredAct s 53
   • (h) ASIC's ability, at any time, to impose or vary ACL conditions (subject to prior notice before imposing additional conditions) - other than the prescribed licence conditions:- see CredAct s 45
   • (i) ASIC's ability to suspend or cancel an ACL where the licensee ceases business or (amongst other things) the licensee (or a senior corporate officer) becomes insolvent, or incapable, or incurs a conviction for fraud, fails to comply with credit legislation (including licence conditions), or where ASIC has reason to believe they are unfit, or likely to contravene that legislation:- see CredAct ss 54 & 55
   • (j) ASIC's ability to ban a person from engaging in credit activities where any of the conditions described in the immediately preceding sub-paragraph have been satisfied, and where ASIC has reason to believe that a person (or a senior corporate officer) is likely to be involved in contravention of credit legislation (including where a banning, or disqualification, order has been made under CorpAct ss 920A & 921A):- see CredAct ss 80(1) & 37(2)(c)
   • (k) the provision stipulating that any banning order takes effect when the person is notified of the order:- see CredAct ss 84(1)
   • (l) ASIC's ability to revoke an ACL suspension, and vary or cancel a banning order, in appropriate circumstances:- see CredAct ss 59 & 83
   • (m) ASIC's obligation to publish notice of any (i) ACL revocation, cancellation, suspension or variation, and (ii) any banning order:- see CredAct ss 60 & 84
   • (n) ASIC's obligation to maintain publicly accessible credit registers of ACL licensees, credit representatives, and persons subject to banning and disqualification orders:- see CredAct ss 213 & 214.
3. ASIC's cancellation, suspension and banning powers under the CredAct are subject to requirements for the provision of written reasons:- _see CredAct ss 61 & 85. S_ome decisions are subject to anterior procedural limitations. Those limitations apply to most exercises of the banning power. They apply to the exercise of the cancellation and suspension powers where the basis for their exercise involves either (i) errors or omissions in the person's licence application, (ii) contravention (or apprehended contravention) of credit legislation, or (iii) contemporary absence of satisfaction about the fitness of the licensee (or their representatives). In all of those cases ASIC must first give the licensee (or person) notice of the particular matter, an opportunity to participate in a private hearing, and allow submissions to be made:- see CredAct ss 55 & 80(4).

CORPORATIONS ACT - PROVISIONS RELATING TO FINANCIAL SERVICES

1. The statutory scheme relevant to ASIC's 23 June 2017 financial services decision is relevantly set out in CorpAct Chapter 7 - Financial services and markets and, more particularly in Parts 7.1 (ss 760A to 769C) & 7.6 to 7.9 (ss 910A to 1022C). The general objectives of the Chapter are expressed in s 760A - in the following terms:-

760A Object of Chapter

The main object of this Chapter is to promote:

(a) confident and informed decision making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; and

(b) fairness, honesty and professionalism by those who provide financial services; and

(c) fair, orderly and transparent markets for financial products; and

(d) the reduction of systemic risk and the provision of fair and effective services by clearing and settlement facilities.

1. CorpAct Part 7.1 contains a range of definitional provisions. Part 7.6 (ss 910A to 926B) deals with the licensing of financial services providers, their registration, liabilities and disqualification. Part 7.7 (ss 940A to 953C) deals with the required kinds and content of financial services information. Part 7.7A (ss 960 to 968 - inserted by legislative amendments that commenced on 1 July 2012) imposes a general best interest obligation in the provision of personal financial advice, and regulates related ongoing fee arrangements. Part 7.8 (ss 980A to 993D) deals with general conduct relating to financial products and financial services). Part 7.9 (ss 1010A to 1022C) deals with disclosures required in relation to financial products. The provisions of principal relevance to the present application are:-
   • (a) the general requirement for a person to hold either an Australian financial services licence ("AFS"), or the status of an "authorised representative" of such a licensee, to be able either to carry on a "financial services business", or to be an employee of an entity involved in providing a "financial service" on its behalf:- see CorpAct ss 911A & 766A766D
   • (b) the prohibition on false claims to have an entitlement to provide financial services:- see CorpAct s 911C
   • (c) the requirement of an AFS licensee to (i) "do all things necessary to ensure" the efficient, honest and fair provision of their financial services, (ii) have in place "adequate arrangements" to manage conflicts of interest, (iii) comply with "financial services laws", (iv) comply with their licence conditions (conditions that typically include ensuring the competence, training and individual assessment, of anyone who provides "financial product advice" on the licensee's behalf), and (v) have in place adequate arrangement to compensate retail clients for any obligation breach:- see CorpAct ss 912A(1)(a), (b), (f) & 912B
   • (d) the requirement of an AFS licensee to report to ASIC any actual or apprehended significant breach of its obligations under s 912A (ie., including compliance with the licence conditions):- see CorpAct s 912D
   • (e) the declaration that "financial services laws" relevantly includes duties "even if the provision imposing the duty is not an offence provision or a civil penalty provision":- see CorpAct s 920A(1B)
   • (f) the requirement of a licensee who appoints a person (an "authorised representative") to provide financial services on their behalf, to:-
     • (i) provide an appropriate written authority:- see CorpAct s 916A(1)
2. ASIC's exercise of its cancellation, suspension and banning powers is subject to requirements to provide written decision reasons (see CorpAct ss 915G & 920F), and some anterior procedural limitations. Those limitations apply generally to the exercise of the banning power. They apply to the exercise of the cancellation and suspension powers where the basis for their exercise involves either (i) errors or omissions in the person's licence application, (ii) the existence of relevant banning or disqualification orders, (iii) contravention (or apprehended contravention) of financial services laws, or (iv) contemporary absence of satisfaction about the fame and character of the licensees (or their representatives). In all of those cases ASIC must first give the licensee (or person) notice of the particular matter, an opportunity to participate in a private hearing, and allow submissions to be made:- see CorpAct ss 915C & 920A(4).

1. Comparison of the CorpAct and CredAct provisions readily reveal their similarity. CredAct s 37(2)(c) (see paragraph 32(j) above) points to their potentially complementary operation. Consequently, although CredAct Chapter 2 does not express desiderata equivalent to those contained in CorpAct s 760A, their analogues are implicit in its detailed provisions - especially those referred to in paragraphs 32(d), 32(i) and 32(j) above.
2. In A_ustralian Securities and Investments Commission v Administrative Appeals Tribunal_ [2009] FCAFC 185; (2009) 181 FCR 130 at [54] Downes and Jagot JJ addressed the CorpAct Chapter 7 provisions and emphasised the notions of public interest, and publicly accessible information, as important elements of the objectives of the statutory scheme. In relation to the exercise of the Tribunal's power to say the operation of banning orders made under CorpAct s 920A, their Honours referred to the pre-condition to the exercise of the Tribunal's stay power (see paragraph 29 above) and said:-

[51] The nature of the decision under review will affect the identification of the "interests of any persons who may be affected by the review". Accordingly, those interests are to be identified by reference to the statutory scheme under which the decision under review was made. In the case of a banning order the provisions are those which ASIC identified in the Corporations Act and Corporations Regulations ... It is apparent from those provisions that the person the subject of a banning order is only one of many people whose interests may be affected by the review. ... Given the nature of a banning order, the persons who may be affected by a review of its making include not only the recipient and his or her dependants, associates and employees but also that person's existing and potential clients, as well as the public at large.

[52] Determining whether the making of an order under s 41(2) of the AAT Act is desirable requires resolving these potentially competing interests. In this process of resolution the scheme embodied by the legislation under which the banning order is made is central. ... The scheme discloses that a banning order protects the public.

1. Downes and Jagot JJ then made explicit reference to the procedural limitations on the exercise of ASIC's banning power under CorpAct s 920A (see paragraph 36 above). Their Honours said that those provisions indicated the statutorily intended balance between public and private interests, and were to be treated "as a fundamental element in the weighing of the competing considerations" relevant to the exercise of the stay power. Their Honours then continued:-

[54] ... information is the key to effective trading in any market. It takes the place of regulation in ensuring fairness. A market which is not fully informed is not operating properly. Is not an investor who is about to deposit funds with a person providing financial services entitled to know that a banning order has been made against the person? If the order has been stayed on substantial grounds the person is also entitled to know that. The informed investor may continue with the proposal. If the investor does not, then that is just an example of the operation of the market place. The critical matter is that the market is fully informed. If the banning order is not disclosed, but subsequently upheld, is not the investor entitled to complain that all the circumstances should have been made public?

1. Later in their reasons for decision, after deciding that the Tribunal's stay power extended to permit restraint of ASIC's publication obligations relating to the reviewable decision (see, for example, paragraphs 32(m) & 35(u) above) Downes and Jagot JJ said this about the appropriateness of the exercise of the power:-

[71] ... the scheme which the provisions of the Corporations Act embody - with the potential making of a banning order to remain private unless and until ASIC decides to make such an order after having given the recipient an opportunity to be heard - is not mere statutory background or a neutral factor in the process of the formation of the required opinion about what is desirable under s 41(2) of the AAT Act. The scheme which Parliament has established in the Corporations Act, and the public interest in the right of the market to know relevant information as soon as practicable, must be treated as a fundamental element in the decision-making process required under s 41(2) of the AAT Act.

CRITERIA RELEVANT TO ASSESSING THE PROSPECTS OF A MORE FAVOURABLE REVIEW OUTCOME

1. Consideration of an applicant's prospects of obtaining a more favourable outcome in the review proceedings involves taking into account the potentially incomplete awareness of all material issues, the state and quality of the available primary evidence, the apparent specificity and sufficiency of the decision maker's findings, and the prospect of additional relevant material. Those kinds of considerations require a degree of caution in evaluating an applicant's apparent prospects of success for the purpose of determining a stay application:- see Re Mclean and Australian Securities and Investments Commission [2016] AATA 22 at [8]; Re Jeffers and Australian Securities and Investments Commission [2015] AATA 537 at [38]. Nevertheless, it is appropriate to consider the extent to which the existing, and any postulated, material is either apparently (i) not readily amenable to any evaluative assessment, (ii) unlikely to lead to a favourable variation of the reviewable decision, or (iii) sufficient to provide grounds for confidence about the likelihood of such a variation.
2. Mr Dimitropoulos pointed to his own evidence, and more particularly that of Mr Taba (in a May 2017 statement he had provided to ASIC), to contradict the proposition that he had played any significant part in the management and control of Heritage FSA. Indeed it is fair to acknowledge that parts of Mr Taba's statement contain repeated, and unequivocal, assertions that he was the exclusive controller of Heritage FSA.
3. The existence of that evidence was pressed as requiring the Tribunal to conclude, for the purposes of the present application, that Mr Dimitropoulos had good prospects of success in the substantive review application. The contention was that previous decisions established that an applicant had demonstrated "good prospects of success" merely by pointing to evidence which, if ultimately accepted, would apparently contradict the basis for the decision under review. This proposition was said to have been established by various decisions - including Re Dart v Director-General of Social Services (1982) 4 ALD 553 at p 55; Avtex Air Services Pty Ltd v Civil Aviation Safety Authority [2010] AATA 716, and Levi v Companies Auditors and Liquidators Disciplinary Board (2013) 61 AAR 82; [2013] FCA 719 (at [30]-[32] per Farrell J.
4. Re Dart was a stay application relating to a decision under the Social Services Act 1947 cancelling the payment of a supporting parent's benefit. The decision proceeded on the basis that, under the statutory scheme, and but for the cancellation decision, the review applicant had an accrued statutory entitlement to the benefit (see 4 ALD at 555). The consideration apparently determinative of the applicant's benefit entitlement was whether or not she had been living in a marriage like domestic relationship. The applicant asserted that her role was merely that of resident housekeeper, rather than a domestic partner. It is not clear whether she had conveyed that assertion to the primary decision maker. But it was both clear, and material, that (i) she had not been advised of, and had not participated in, the intervening appeal hearing before the Social Security Appeals Tribunal, and (ii) the reasons for that Tribunal's appeal decision were not available. In granting the stay application Davies J (the then President of the Tribunal) said this:-

It is not convenient or appropriate that on this application for a stay there should be any preliminary trial of the issues that will ultimately have to be considered by the Tribunal. For the present, it is sufficient that, if the facts which are put to me are established at the hearing, the applicant will succeed in the review. ... I am not considering a case where an applicant has had a full hearing.

1. In Avtex the Civil Aviation Safety Authority had cancelled an air operators certificate and the Tribunal, in an ex tempore interim decision, had rejected Avtex's stay application. A little over a fortnight later Avtex made an application that the Tribunal member who had rejected the stay application should disqualify himself from hearing the substantive review application. The application was based on Avtex's complaints about arguably sceptical views the Tribunal member had expressed in the course of the hearing and determination of the unsuccessful stay application. In rejecting the disqualification application Senior Member Fice (i) specifically rejected the proposition that the Tribunal was required to approach the exercise of the stay power on the assumption that an applicant had a reasonably arguable case, (ii) drew attention to the potential significance of the primary decision maker's findings and reasons, and contrasted that situation with the criteria for the summary dismissal of judicial proceedings where the court is satisfied that a party has "no reasonable prospect" of successfully prosecuting or defending a particular claim (see [2010] AATA 716 at [22] & [23]). Senior Member Fice then went on to say this:-

24. In my opinion, the Tribunal's task is not to conduct a mini trial. It needs to examine the factual material before it and the relevant law, and arrive at a conclusion that the applicant could succeed if the stated facts were proved to the relevant level of satisfaction. Put in the context of a stay application before this Tribunal, provided that the claim by an applicant is not unmeritorious, then the stay provisions under s 41(2) of the AAT Act are enlivened. If the claim is unmeritorious, they are not. That is because s 41(2) of the AAT Act requires the Tribunal to form the opinion that it is desirable to grant a stay.

1. This passage needs to be read carefully and understood in its context. The context of the statement was one of emphasising that the Tribunal was required to make some assessment, rather than a mere assumption, about an applicant's prospects of success. That assessment was not, however, one that involved a "mini trial". Consequently the assertion of particular facts could, even where highly contentious between the parties, permit satisfaction that an applicant had relevant prospects of success. But the particular proposition that the Tribunal's stay discretion is "enlivened" "provided that the claim by an applicant is not unmeritorious" is gravid with imprecision and discordant with the actual wording of AAT Act s 41(2). That discord is obvious in the contrast between the third last sentence and the last sentence in the passage set out above. It is highly unlikely - given both that contrast and the reasoning in A_ustralian Securities and Investments Commission v Administrative Appeals Tribunal_ [2009] FCAFC 185; (2009) 181 FCR 130 - that Senior Member Fice was intending to convey that the Tribunal was required to conclude that a stay was "desirable" merely because a review application was "not unmeritorious". The far more likely meaning of the passage is that the minimum condition for the exercise of the stay discretion is the Tribunal's actual satisfaction, rather than a mere assumption, about the potential merit of a review application. That conclusion is pointed to by the use of the expression "enlivened" in describing the necessity for an applicant to have a "not unmeritorious" claim. The "enlivening" of the s 41(2) stay power says nothing about the ultimate "desirability" or appropriateness of the actual exercise of the power. Neither does anything in the paragraph [24] passage require a conclusion that a review application which is "not unmeritorious" has "good" prospects of success.
2. The decision in Levi v Companies Auditors and Liquidators Disciplinary Board [2013] FCA 719 concerned a successful appeal to the Federal Court of Australia against the Tribunal's refusal to stay a decision of the Companies Auditors and Liquidators Disciplinary Board cancelling the registration of a liquidator. That decision was authorised by CorpAct s 1292, and was subject to procedural requirements of prior notification and hearing:- see CorpAct s 1294. One of the substantive grounds of the appeal was that the Tribunal had failed to form any view about the applicant's prospects of success on a particular factual issue. The argument put by the applicant was summarised in judgment in the following terms:-

[20] The applicant accepts that the Deputy President did not have to pursue the ... issue to finality, but says the Deputy President was required to make a proper inquiry into whether the arguments raised by the applicant had prima facie merit and to determine: (1) their impact on the applicant's prospects of success in the substantive proceedings, and (2) how that factor should be balanced against other operative factors (such as prejudice or public interest).

1. In rejecting the primary aspect of the appellant's argument Farrell J noted the generally accepted view that the exercise of the Tribunal's stay discretion did not call for any preliminary trial of the contested issues. Her Honour cited propositions to that effect from Re Griffiths Grif-Air Helicopters Pty Ltd and Civil Aviation Authority [1993] AATA 274; (1993) 31 ALD 380 at [55]; and Liu and Australian Securities and Investments Commission [2013] AATA 117 at [31]. Her Honour also set out the following passage from an earlier decision of Senior Member Fice in Re Snook and Civil Aviation Safety Authority [2008] AATA 861; (2008) 109 ALD 122:-

[21] It is well understood that in considering an applicant's prospects of success for the purposes of a stay application, it is not appropriate to conduct a preliminary trial of the issues: see Re Dart and Director-General of Social Services (1982) 4 ALD 553 at 555. Rather, the tribunal must consider whether there are facts and circumstances which, if established at the substantive hearing, would provide a basis for the applicant's success in the review on application; or whether there are points of law raised which, if sustained, would lead to that conclusion: see Re Commonwealth and Quirke [1986] AATA 57; (1986) 9 ALD 92 at 95.

1. Farrell J then went on to conclude (at [33] & [35]) that (i) it was not necessary for the Tribunal to have reached any concluded view about the significance of the contentious evidence, (ii) the Tribunal could properly have taken into account the possibility of additional favourable evidence being available at the substantive hearing, and (iii) that the Tribunal should be taken to have accepted that the contentious evidence and argument "had some weight" having regard to "the standard commonly applied". Because of those findings, Farrell J rejected the applicant's principal argument. However, Her Honour went on to find that the Tribunal had erred because its brief reference to the applicant's prospects of success were "troublingly and ultimately too obscure as to how the "prospects of success" factor weighs in the balance of factors" relevant to the exercise of the stay power. The critical factor that Farrell J considered the Tribunal had failed to address adequately was the potential impact of the cancellation decision, on prospective criminal proceedings against the review applicant.
2. Farrell J's criticism of the Tribunal's stay reasoning in Levi - that the Tribunal failed to carry out an appropriate evaluation of the comparative weight to be given to the applicant's prospects of success in the particular circumstances - is inconsistent with the proposition advanced, at least initially, on behalf of Mr Dimitropoulos in the present proceedings. That proposition was to the effect that an applicant who can point to apparently arguable facts that would contradict the basis for the decision under review, must be regarded as having good prospects of success. There is no express statement to that effect anywhere in Farrell J's reasoning, and Her Honour's finding that the comparative weight of an applicant's prospects of success must be evaluated, is inconsistent with any proposition of law that the Tribunal must necessarily regard apparently arguable prospects of success as necessarily "good".
3. Also inconsistent with the submission proffered by Mr Dimitropoulos is the approach taken by Deputy President Alpins in Jeffers v ASIC [2015] AATA 537. There the Deputy President, after referring to Re Dart (and similar decisions) accepted (at [42]) that the applicant's review application "appears to be an arguable one", but went on to say that his prospects of success could not be regarded as a determinative consideration when they appeared to be "neither particularly strong nor particularly weak".
4. The view that the reasoning in Re Dart, and Avtex, addresses the minimum requirement that a stay applicant must meet in relation to their apparent prospects of success, is consistent with the approach taken in two other Tribunal decisions to which the applicant drew attention in post hearing written submissions:- Re Commonwealth and Quirke [1986] AATA 57; (1986) 9 ALD 92 at 95 and O'Sullivan v Australian Securities and Investments Commission [2015] AATA 265 at [7]- [11]. Those later written submissions put the proposition about prospects of success in terms that apparently resiled, in a significant respect, from the previously articulated contention. The emphasis in the written submission was that Mr Dimitropoulos could point to matters that would (if established) provide a basis for his success and, as a consequence, his prospects of success were "sufficient" to warrant the grant of a stay, "subject to consideration of the other matters relevant to the grant of such interim relief". In that submission the critical expressions are the reference to sufficiency, and the acknowledgement that the sufficiency of the postulated matters is but one factor to which regard must be had in considering the exercise of the stay discretion. The regard taking process must ultimately address the statutory criterion of the Tribunal's satisfaction as to what is "desirable" in the particular circumstances. That satisfaction may be influenced by the existence of an apparently arguable basis for ultimate success. But the breadth and generality of the "desirable" criterion is inconsistent with the Tribunal being bound by any inflexible assumption that apparently arguable prospects of success must also be relevantly characterised as "good".

1. ASIC's more detailed contravention findings in the credit decision are not without some difficulties. As I have pointed out, there is some apparent generality about the basis for some of the respects in which ASIC found that Sunpac had failed to comply with its obligations under CredAct s 47. There is also some apparent dissonance in relation to the distinctions ASIC drew between the provisions with which ASIC regarded Sunpac as having complied, and those which it regarded Sunpac as having contravened:- see paragraph 14 above. In particular, given those matters, and the concession ASIC's reasons appear to have made about Sunpac's small size, and evident training activities, it is appropriate to reach a positive conclusion that Mr Dimitropoulos has an apparently genuine and reasonably arguable basis for challenging ASIC's findings in relation to at least those aspects of Sunpac's contraventions of CredAct s 47 (other than s 47(a) & 47(b)) and s 255. Contrary to ASIC's submissions, I am far from satisfied that Mr Dimitropoulos' prospects of success on those matters are far fetched.
2. The position in relation to both Sunpac's contraventions of CredAct s 47(a) & 47(b), and ASIC's alternative finding of reason to believe that Mr Dimitropoulos is likely to contravene credit legislation, is rather less clear. It is readily apparent from ASIC's reasons that it regarded the businesses conducted by Sunpac and Heritage FSA as substantially conflated - at least after Heritage FSA's incorporation in February 2010. It is also apparent that ASIC did not regard either Mr Dimitropoulos or Mr Taba as having explained with any adequacy or accuracy the precise nature of the arrangements (i) between Mr Dimitropoulos and Heritage, (ii) between Mr Dimitropoulos and Vegeta, (iii) between Mr Dimitropoulos and the various Parisi controlled entities, and (iv) between Mr Dimtropoulos and Mr Taba.
3. All of these were matters of apparent relevance and importance - at least given ASIC's apparently uncontested findings that the conflated Sunpac / Heritage business typically involved the sale of land by Parisi related entities to "clients" whose interest in such transactions had been actively solicited by Sunpac / Heritage representatives, and were the subject of recommendations by them. The potential relevance and importance of those findings was heightened by the facts of the regular payments made to Mr Dimitropoulos by both Vegeta and by interests associated with Mr Parisi.
4. The explanations proffered to ASIC by both Mr Taba and Mr Dimitropoulos about the payments made to Mr Dimitropoulos were cryptic and lacking in detail. Mr Taba acknowledged that he caused Vegeta to pay Mr Dimitropoulos $4,000 a week in relation to "other business dealings" involving Mr Parisi. Mr Dimitropoulos acknowledged he received regular payments of that amount, but he denied that he had provided any services to Vegeta, denied knowledge of any arrangement between Vegeta and Fast Loans, claimed to have been unaware of any payments by Vegeta, and asserted a belief that the particular amounts were repayments of money he had advanced to Mr Parisi, In relation to the payments Mr Dimitropoulos received from entities related to Mr Parisi, Mr Dimitropoulos claimed that these only started from around June 2013, and related to other, unspecified "services" he provided in relation to Mr Parisi's real estate activities.
5. However, ASIC's reasons for the adverse view it took about the apprehended relationships between Mr Dimitropoulos, Vegeta and the Parisi interests were also cryptic and lacking in detail. In those circumstances, it is not possible either to undertake any really informed assessment of the apparent cogency of ASIC's findings, or to conclude, as ASIC's submissions invited, that Mr Dimitropoulos' prospects of success were far fetched. The opacity of ASIC's reasons, together with the evidence to which Mr Dimitropoulos has pointed, again suggest that he has an apparently genuine and arguable basis for contesting ASIC's findings about contravention of CredAct s 47(a) & (b).
6. Much the same conclusion applies, and for substantially the same reasons, to ASIC's alternative finding (in relation to the Sunpac non-compliance issues) that there was "reason to believe" Mr Dimitropoulos was likely to contravene credit legislation. As I read ASIC's credit decision, that finding was primarily driven by apprehension about the nature of Mr Dimitropoulos' dealings with Vegeta and the Parisi interests.
7. It is apparent from my earlier analysis of ASIC's findings in relation to Heritage FSA's CredAct contraventions, that the principal basis for those findings, at least in relation to the question of apprehended future non-compliance, was also directly related to apprehensions about the relationships between Mr Dimitropoulos, Vegeta and the Parisi interests. Accordingly, it is again appropriate to conclude that Mr Dimitropoulos has an apparently genuine and arguable basis for contesting ASIC's findings not only about the contravention of CredAct s 47(a) & (b) but also its finding about apprehended future non-compliance.
8. ASIC's findings concerning Mr Dimitropoulos' personal conduct relating to Heritage FSA's non-compliance (both CorpAct and CredAct) essentially depend on the proposition that he had a controlling management position in relation to the business of that company. It is clear from Mr Dimitropoulos' evidence, and that of Mr Taba, that this is a proposition they reject, and strongly contest. It is equally clear that it is a proposition ASIC regarded as supported by a substantial body of evidence, including statements provided by former clients and employees. ASIC accepted that evidence, after taking into account both the evidence of Mr Dimtropoulos and Mr Taba, and their criticism of the credibility of former colleagues. It is readily apparent that the resolution of this contest is likely to be significantly influenced by (i) close attention to the detailed evidence, and (ii) impressions of the credibility of the various witnesses. It is a resolution that is not appropriate to embark upon at this stage of the proceedings - except to the extent of expressing satisfaction, which I do, that the contest foreshadowed by Mr Dimitropoulos is apparently genuine and potentially supportable.

1. Mr Dimitropoulos appears to have disassociated himself from credit activity and financial services since about mid-2013. That appearance comes from the sale of his interest in Sunpac, and the claim in his affidavit in the present proceedings, that he ceased any such involvement because of ASIC's investigation into Sunpac and Heritage FSA. Mr Dimitropoulos says that he would have continued to work in roles related to credit and financial services, but for ASIC's investigation. That latter claim seems somewhat dissonant with other aspects of his evidence. Those aspects of his evidence included the assertions that (i) in early May 2010 he had decided to pursue a legal career (and then commenced a Juris Doctor course at Sydney University - a course that he successfully completed in 2012), (ii) not long after Sunpac obtained its ACL (in February 2011) he intentionally began to wind down Sunpac's credit business and the company stopped active pursuit of new business, (iii) Sunpac's last loan activity was during 2012, (iv) by January 2013 Sunpac was no longer involved in credit activity and in January 2013 he had sought to surrender Sunpac's ACL, (v) he had no active role, and certainly no paid role, in the business of Heritage FSA, and had provided assistance to Mr Taba exclusively on the basis of personal friendship, and (vi) that he had apparently ceased any involvement with Heritage FSA by some time during 2012. However it is clear that Mr Dimitropoulos has an extensive background in financial services and credit related business, and that he has numerous pertinent qualifications that would be likely to stand him in good stead in either seeking employment in, or in endeavouring to establish, such a business.
2. In his May 2017 statement to ASIC Mr Dimitropoulos said he was "currently" working as a property developer. But he gave no further details of that activity. He made the same claim, with the same absence of detail, in the affidavit he provided in support of the present applications. Other aspects of Mr Dimitropoulos' evidence suggest that, for at least part of the time since June 2013 (until December 2013) he was being paid regularly by companies associated with Mr Parisi. Mr Dimitropoulos pointed to his situation as a married father, with a dependent wife and five young children. He also indicated that he financially supported his grandmother. He asserted that his financial position was precarious, and that the ASIC decisions would cause him significant financial hardship unless stayed. But neither of those claims was supported by any specific evidence. He provided no details of the nature and extent of his work as a property developer. There was no evidence of his assets, income, actual activities or prospects. And in those circumstances there is no adequate basis to arrive at a conclusion that Mr Dimitropoulos' financial circumstances would be significantly adversely affected by the continuation of the banning orders pending the resolution of the review proceedings. This is particularly the case, having regard to the undertaking Mr Dimitropoulos has proffered:- see paragraph 66(e) below.

1. Mr Dimitropoulos emphasised his involvement with his local church community, his childrens' schools, as a volunteer for various charities and as a member of various professional associations. He expressed concern that publication of the banning orders would, or could, adversely his ability to continue to participate effectively in his community activities, and to retain membership of his various associations. However, these matters were put in a general way, and really turned on the likelihood and potential significance of reputational harm associated with publication of the banning orders.

1. The principal basis on which Mr Dimitropoulos pursued his stay application, in light of his challenge to the findings on which they were based, was his apprehension of irreparable reputational harm from publication of ASIC's two decisions - even if his review applications were ultimately successful. He asserted his current repute as a person of good character, and otherwise good repute, within the finance industry - assertions that were supported by references from colleagues, and not disputed by ASIC. He articulated concern that "relationships and reputation" were crucial in the finance industry and that public knowledge of ASIC's decisions would adversely affect his future prospects within the finance industry.
2. I accept the reality of Mr Dimitropoulos' concerns about the prospect of reputational harm. I accept also that there is some prospect of reputational harm pending the outcome of the review proceedings. But I do not accept that the prospect of significant reputational harm is as great as he apprehends, or that there is a significant risk it would be enduring or irreparable, if he was successful in the review proceedings. Success in those proceedings would exonerate him from ASIC's criticisms. He would then be free to obtain, and free of any significant obstacle to obtaining, any licence or authority required to engage in credit activity, and / or the provision of financial services. And obtaining any or all of those would (having regard to the relevant statutory provisions) be an endorsement of both his competence and his fitness.

1. The material emphasised in the contest over the present applications did not convey a significant basis for prophylactic urgency in the operation and publication of the banning orders. This was because, so far as the emphasised evidence revealed:-
   • (a) Mr Dimitropoulos ended his association with Sunpac in June 2013
   • (b) Heritage FSA appears to have ceased relevant activity in 2015 (at the latest) and appears to have gone into liquidation
   • (c) ASIC's findings against Mr Dimitropoulos appear to relate to conduct that ended over four years ago
   • (d) Mr Dimitropoulos is apparently not currently engaged, and has not been engaged since mid-2013, in any credit activity or the provision of financial services
   • (e) Mr Dimitropoulos offers an undertaking that, pending the determination of his review applications, he will not engage in any credit activity, not provide financial services, and neither be a director of, nor participate in the management of, nor provide any training services for on behalf of, "any of the entities that were the subject of" ASIC's decisions.
2. It is against this background that Mr Dimitropoulos suggests the public interest intended to be served by the CorpAct and CredAct statutory schemes would be sufficiently served by the undertaking he has proffered. In relation to the scope of the undertaking, it is relevant to note that it refers to office holding, service provision and management activities. In so doing it appears to extend beyond conduct that would be directly prohibited by, or regulated under, the CorpAct and CredAct statutory schemes. In relation to the utility of the undertaking, it was submitted on Mr Dimitropoulos' behalf that its breach would render him amenable to the offence sanctions provided for in AAT Act s 63 (relating to contempt of the Tribunal).
3. ASIC did not actively dispute the proposition that breach of the proffered undertaking would render Mr Dimitropoulos amenable to the sanction of offence proceedings under AAT Act s 63. But ASIC did dispute Mr Dimitropoulos' contention about the public interest sufficiency of the proffered undertaking. ASIC pointed to (i) the ordinary publication consequences of banning order decisions, (ii) the emphasis that Downes and Jagot JJ (see paragraphs 39 and 40 above) on the public interest in maintaining an informed market place, and (iii) the potential relevance of "general deterrence" in tending to promote compliance with the proper standards of conduct required by the CorpAct and CredAct schemes. ASIC complained that it would be difficult for it to "supervise" the proffered undertaking, and thus compliance with the statutory regime, in the absence of the ordinary publication of the banning order.
4. ASIC urged adoption of the approach taken by Deputy President Alpins in Jeffers v ASIC [2015] AATA 537. There the Deputy President, in considering an unconditional undertaking not to provide "any financial services", observed that it would generally be preferable to embody the practical effect of such an undertaking by making a stay order conditional. The Deputy President considered that such conditional order offered a potentially more immediate and practical way of ensuring the applicant's good conduct during the review process. (That potential is a relevant consideration, but it is not itself a determinative reason for preferring the mechanism of conditional stay to that of an undertaking. This is because AAT Act s 41(3) authorises the Tribunal to vary or revoke any stay order, irrespective of whether or not its terms were expressly conditional.) The Deputy President considered that a more determinative consideration against acceptance of the proffered undertaking was that, despite an unconditional undertaking "largely" achieving "the protective effect of the banning order" it would lack the deterrent effect of a banning order and its ordinary publication:- see [2015] AATA 537 at [69].
5. There is no doubt that "general deterrence" is a recognised as a relevant consideration in the exercise of the banning order discretion. However, as examination of the decisions cited in Jeffers (at [2015] AATA 537 [33]) shows, the proposition is generally expressed in those terms in relation to the substantive exercise of the discretion, rather than the exercise of the stay power in AAT Act s 41(2). Another way of expressing the matter is simply to return to the reasoning of Downes and Jagot JJ, and their Honours' emphasis that the ordinary statutory requirement of publication of banning orders made by ASIC after observance of the applicable procedural requirements, should be regarded as a matter of fundamental importance in the exercise of the stay discretion:- see paragraph 40 above.
6. Return to that consideration as a fundamental element in the exercise of the stay discretion, tends to expose the potential significance of (i) the qualification that an undertaking "largely" achieves "the intended protective effect" of a banning order, and (ii) ASIC's complaint about the practical difficulty of enforcing an undertaking. The significance is two fold. First of all, it serves as a reminder that the public interest intended to be served by the publicity of a banning order ought not be confined to prophylactic considerations. There is at least a potential public interest in promoting contemporary awareness of the ongoing supervision and enforcement of the statutory scheme. There is also a potential public interest in promoting appropriate remediation of the consequences of past non-compliance. Second, the publication of the banning order is at least of potential significance in ensuring the efficacy of the order itself - because detection of non-compliance is then less dependent on ongoing active monitoring by ASIC itself. That potential significance is absent in the case of an undertaking that is intended to be withheld from general publication.
7. Both of those considerations are factors influencing me to an absence of satisfaction that the stay sought by Mr Dimitropoulos is desirable. Another factor involves the terms of the proffered undertaking. As I pointed out earlier, in so far as the undertaking extends to include office holding, service provision and management activities, it is apparently more extensive than the direct prohibitions in the respective statutory schemes. However, that appearance is potentially illusory, in the light of (i) the apparent liquidation of Heritage FSA, (ii) Mr Dimitropoulos' disposal of his interest in Sunpac, and (iii) the presumably intentional, but imprecise, limitation of the undertaking to the particular entities that were the subject of ASIC's decisions. The fundamental element described by Downes and Jagot JJ is in my view a determinative consideration in the present circumstances. Whilst I accept that Mr Dimitropoulos has sufficiently apparent prospects of success in the review proceedings, the reality is that, in the context of the present applications he has produced no significant material that he had not previously proffered to ASIC. ASIC's decision reasons show that it considered that material, in reaching its decisions. Against that background, the imprecisely articulated and general apprehensions Mr Dimitropoulos has about the reputational harm he may suffer as a result of publication of the banning orders, does not conduce in me an actual satisfaction that the stay orders he seeks are relevantly desirable or appropriate.

POWERS AND PRINCIPLES RELATING TO THE PUBLIC ACCESSIBILITY OF REVIEW PROCEEDINGS

1. The nature of the confidentiality orders Mr Dimitropoulos sought, and the basis on which he pursued them, have been outlined earlier in these reasons:- see paragraph 4 above. The sufficiency of his contentions needs to be evaluated against the background of the terms of the statutory power he sought to have the Tribunal invoke.
2. That power, set out in AAT Act s 35, would extend to permit each of the confidentiality orders that Mr Dimitropoulos sought. The exercise of that power is governed only by two limitations. One limitation is that the Tribunal must pay "due regard" to any reasons tending to favour making the particular order sought. The other limitation is that, in considering whether to make any such order the Tribunal must base its consideration on the desirability of three things - (i) the public conduct of Tribunal hearings, (ii) the public availability of the evidential material in review proceedings, and (iii) the public availability of the documents lodged with the Tribunal for the purposes of the proceedings:- AAT Act s 35(1) to (5). That limitation highlights the real tension between the orders that Mr Dimitropoulos seeks, and the statutory emphasis on the desirable publicity of the Tribunal's review proceedings.
3. The terms of AAT Act s 35(5) explicitly indicate that the confidential nature of any information relevant to the review proceedings is one of the reasons that may favour an order limiting the publicity that would otherwise apply to the review process. But the extent to which, if at all, confidentiality provides a significant consideration in any particular case will depend on the actual nature of the information, the apprehended consequences of publicity, the materiality of the information to the proper determination of the review proceedings, and the statutory scheme relevant to the decision under review. Personal information, of limited relevance to the matters likely to be in issue, may permit a departure from the general principle. Information of a commercially significant kind may also justify a similar permission. But mere apprehension about the potential for reputational harm directly resulting from the reviewable decision will usually not provide a persuasive basis for restricting the publicity of review proceedings. In Australian Securities and Investments Commission v Administrative Appeals Tribunal for example, the Full Court of the Federal Court emphasised (at [2009] FCAFC 185 [74] & [75]) that AAT Act s 35 established a publicity norm, similar to that which applied in judicial proceedings. That norm applied because of the generally accepted importance of open, accessible and informed determination where decision makers exercised adjudicative powers in carrying out statutorily conferred functions.
4. That norm has an additional significance in the light of the statutory schemes involved, in both the CorpAct and the CredAct, in relation to banning orders of the kind made by ASIC in the decisions challenged by Mr Dimitropoulos. That significance emerges from the reasons for judgment of Downes and Jagot JJ in Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130. Referring specifically to the circumstance of a banning order under CorpAct ss 920A & 920B, their Honours said;

[76] When measured against the existence of the norm of a public hearing and the scheme established by the Corporations Act with respect to banning orders, it is apparent that the AAT would need some cogent reason by reference to the particular case to depart from the ordinary requirement of a public hearing. It is difficult to accept that harm (even serious harm) to the recipient's reputation resulting from public awareness of the banning order will be a sufficiently cogent reason to justify the grant of a stay in most cases. This is because the risk of harm of this type is inherent in the nature of a banning order.

1. The emphasis their Honours placed on a requirement for "some cogent reason" in "most cases" cannot, of course, replace the conditionally permissive generality of the powers conferred by AAT Act s 35(2), (3) & (4). But it is a useful indicator of the significance that ought to be accorded to the explicit statutory requirement about the principle the Tribunal is to take as the basis of its consideration in any application for the exercise of those powers.
2. In the present application Mr Dimitropoulos properly and correctly conceded that apprehended reputational harm would not generally suffice to provide an appropriate basis for the exercise of the AAT Act s 35(2) to 35(4) powers. The proffered reason for the exercise of those powers was that the apprehended harm and disadvantage was likely to be severe. However, this was no more than assertion. As I indicated earlier in these reasons, when dealing with a similar contention in relation to the stay application, it was not substantiated by any substantive material addressing Mr Dimitropoulos contemporary circumstances or prospects. In addition, it was characterised by an extremely pessimistic and unreasoned view about the likelihood of ongoing reputational harm even if the review proceedings were substantially successful.
3. As Downes and Jagot JJ recognised in the passage cited above (in paragraph 76) there is an inherent risk of reputational damage as a result of the pendency of proceedings to review banning decisions of the kind in contest in the present proceedings. It is also the case that notwithstanding that inherent risk, the Tribunal has a statutory obligation to recognise the desirability of publicity in relation to the review of those kinds of decisions. In my view that latter obligation precludes, in the circumstances of the present case and the reasons proffered by Mr Dimitropoulos, acceptance of the proposition that it is appropriate to make any of the confidentiality orders sought.

1. The stay and confidentiality order applications are refused.

I certify that the preceding 80 (eighty) paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member

...............[sgd].........................................................

N Goodstone, Australian Securities and Investments Commission