Gordon v Australian Securities & Investments Commission

the contention 14 In the application, the conduct which is said to give rise to a reasonable apprehension of bias in the delegate in relation to the proposed hearings under s 837 in respect of each of the applicants is as follows: "(1) Ms Maroney's conduct in causing a Section 837 Notice to be issued against Greater Western Financial Services Co Pty Ltd (a company for which the applicants are the sole directors and shareholders), after Section 837 Notices had been issued against the applicants, but before the applicants' cases had been heard; and (2) Ms Maroney's decision to issue a Section 837 Notice against the first applicant, in part related to the first applicant's alleged degree of involvement in investment schemes known as the infomercial and music schemes ('the schemes'), without directly questioning or otherwise making enquiries with the first applicant about the first applicant's involvement in the schemes." 15 ASIC contended that the circumstances, even as alleged by the applicants, could not give rise to a reasonable apprehension of bias on the part of the delegate in her conduct of the hearings under s 837 or in any decisions she might make following those hearings. It also contended that the decisions complained of, namely decisions made on or about 5 August 2002 to convene separate hearings under s 837 in respect of each of the applicants on designated dates to determine whether banning orders should be made with respect to each of the applicants, are not reviewable decisions under the ADJR Act.

(a) Jurisdiction 16 On 5 August 2002, the delegate notified the applicants by their solicitors that she proposed to continue to conduct the hearings under s 837 of which she had given notice on 6 June 2002 to the second applicant and on 24 June 2002 to the first applicant. The notification followed an exchange of correspondence between ASIC and the solicitors for the applicants concerning their request that the delegate not conduct the hearings. 17 The decisions by which the delegate was allocated the task of considering the briefed material to determine whether banning orders should be made under s 830 against the applicants are not the subject of challenge in these proceedings. Nor are the delegate's decisions notified on 6 and 24 June 2002 that she should give effect to s 837(2) by giving the applicants the opportunity of a private hearing and to make submissions and give evidence in relation to the matters of concern. It is only the subsequent decision of the delegate to continue to conduct the hearings, in effect in the face of the request on behalf of the applicants that she not do so, which is the subject of the present application. 18 Sections 5 and 6 of the ADJR Act permit judicial review of "a decision to which this Act applies", and conduct which is engaged in or proposed to be engaged in for the purpose of making a decision to which the Act applies. Section 3(1) defines the expression "a decision to which this Act applies" relevantly to mean a decision of an administrative character made, proposed to be made, or required to be made under an enactment. If the decision complained of is "a decision" made under the Act or the ASIC Act, in my view it would clearly fall within the compass of that definition as it is clearly of an administrative character. 19 In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (Bond), Mason CJ at 337-338 explained that a decision, to be reviewable under the ADJR Act, will generally entail one required or authorised by statute which "is final or operative and determinative, at least in a practical sense, of the issue falling for consideration". Thus, Finn J in McLachlan v Australian Securities Commission (1998) 28 ACSR 473 concluded that a decision to issue a notice of hearing under s 52(2) of the ASIC Act, or under s 837(2) of the Act, is not reviewable under s 5 or 6 of the ADJR Act as such a decision merely puts in train a process which may lead to a decision which has consequences of the kind to which Mason CJ adverted in Bond. 20 In my view, the decision complained of is of a similar character. It is maintaining the process initiated by the notices given on 6 and 24 June 2002 in an effort to comply with s 837(2) of the Act. It does not itself result in any determination, even on an intermediate basis, of rights or liabilities of the applicants or of any substantive issue. If I had not taken that view, I would have concluded that the decision complained of is a decision under the Act and the ASIC Act, as those enactments provide the legislative source for the entitlement and, in the present circumstances, the obligation to conduct the proposed hearings and to make decisions under s 830 of the Act. 21 On appeal from the decision of Finn J, the Full Court was not confronted with any claim that the Court lacked jurisdiction to entertain the particular complaints then made about how the ASIC delegate was to proceed to make a decision under s 830 of the Act: see McLachlan v Australian Securities and Investments Commission (1999) 85 FCR 286 (McLachlan). One issue raised was whether the delegate should be disqualified from conducting the proposed hearing by reason of apprehended bias. If the present application were amended to complain that the proposed conduct of the delegate for the purpose of making a decision under s 830 of the Act, namely the conduct of the proposed hearings, involves a contravention or likely contravention of the rules of natural justice by reason of apprehended bias on the part of the delegate, then in my view the claim would fall within s 6(1)(a) of the ADJR Act. I propose to consider the present application as if such an amendment were made. If the application were otherwise to succeed, I would give the applicants the opportunity to seek such an amendment and of course I would also give ASIC the opportunity to oppose it. However, as I have concluded that the application must fail in any event, it is not necessary to consider that issue further.

(b) Apprehended Bias 22 There is no dispute about the applicable law. Under s 59 of the ASIC Act, the rules of natural justice apply to a hearing conducted by ASIC. Any decision to be made under s 830 of the Act also clearly attracts the rules of natural justice or procedural fairness in its process of decision making. 23 No actual bias is alleged. The allegation is that there is a reasonable apprehension of bias on the part of the delegate that she may have pre-judged the issue of whether banning orders should be made against the applicants. The applicants contend that the appropriate legal test is identified by Kirby J in Minister for Immigration & Multicultural Affairs v Jia Legeng (2001) 205 CLR 507; [2001] HCA 17 (Jia). Kirby J said at 548-549: "An applicant in such a case is not concerned, as such, with the state of mind or attitude of the decision-maker. The focus of attention is on the decision itself and the manner in which it was apparently arrived at. The criteria are not subjective to the decision-maker. They are wholly objective. The issue raised is decided not by reference to a serious accusation of deliberate wrongdoing and misuse of office. It is judged by the much more readily established consideration of how the decision, and the process of arriving at it, might appear to the persons affected and to the public, judged reasonably and objectively. Many decisions of this Court have emphasised that imputed bias is determined by reference to a standard that is more easily made out. Such bias must still be "firmly established". It is not enough that the reasonable bystander has a vague sense of unease or disquiet. The test for imputed bias, which has now been accepted by this Court, is expressed in terms of possibilities (might), rather than of the proof of a 'high probability' of bias inconsistent with the fair performance of public duties, that was formerly the accepted criterion." I do not consider his Honour's expressions in that case differ from, or were intended to differ from, previous observations of the Court. In my view a reasonable apprehension of bias will be made out if it is established that a suspicion may reasonably be engendered in the minds of those who come before the decision maker or in the minds of the public that the decision maker may not bring to the resolution of the questions arising for decision a fair and unprejudiced mind: see R v Commonwealth Conciliation & Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546 at 553-554 (Angliss); R v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 261-262, and 264; Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293-294. That test is to be applied having regard to the nature of the jurisdiction being exercised and to the statutory provisions governing its exercise: Angliss at 553. I accept, as counsel for the applicants urged upon the observations of Kirby J in Jia at 549, that the purpose of the rule of apprehended or imputed bias is "to uphold vigilantly the high standards applicable to the appearance of justice and fairness in official decision-making in Australia". 24 I therefore address the circumstances to determine whether a fair minded person might reasonably suspect that the delegate might not resolve the questions before her with a fair and unprejudiced mind. 25 In the light of the decision of the Full Court in McLachlan, it was not argued that the delegate reaching a state of mind sufficient to oblige the delegate to comply with s 837(2) of the Act is itself any reason to suspect the delegate will not then address the issues with a fair and unprejudiced mind: see per Kenny J (with whom O'Loughlin and Mansfield JJ agreed) at 301-302. The fulfilment of that statutory obligation cannot of itself give rise to a reasonable apprehension of bias on the part of the delegate. Nor is there anything in the terms of the two notices under s 837(2) given on 6 and 24 June 2002 which is said to do so. The terms of those notices are entirely consistent with an open mind being brought to bear on the consideration of the task imposed by s 830, including the conduct of the two proposed hearings and the consideration of any material that emerged in the course of or as a result of those hearings. 26 In my judgment, the sequence of the three s 837 notices to the second applicant, the first applicant and then to GWPS, in the light of the content of those notices, also does not give rise to any reasonable suspicion on the part of a fair minded person that the delegate might not approach the questions before her with a fair and unprejudiced mind. Counsel for the applicants said the timing and sequence of those notices was the critical issue. He asked rhetorically why the notices should have been issued in a staggered sequence rather than simultaneously. He pointed out that, in large measure, the material relied upon by the delegate in forming her views upon which the s 837 notices were given to the applicants is common or overlaps. 27 In my judgment, there is no foundation upon which a fair minded person might suspect from those circumstances that the delegate might not resolve the questions before her with a fair and impartial mind. The fact that the delegate formed the views which are expressed in each of the notices upon material which, in large measure, is said to be common in each of the three briefs, could not reasonably lead a fair minded person to have any such suspicion. Because the delegate was of the view, on the material in the brief concerning the second applicant, there was some basis for considering a banning order she was obliged to comply with s 837(2) of the Act. Her state of mind does not advance beyond that point because, on the material in the brief concerning the first applicant, she formed a similar view and so had to comply with s 837 in relation to him. Whether the material she considered in the brief was in practical terms the same, or was materially different, the level of intellectual satisfaction reached to activate the obligation under s 837(2) is the same. Her state of mind does not advance beyond that point because, on the material in the brief concerning GWFS, she formed a view which also obliged her to comply with s 837(2) in relation to GWFS. Again, whether the material she considered in that brief was in practical terms the same, or was materially different, the level of intellectual satisfaction reached to activate the obligation under s 837(2) is the same. In each case, that level of satisfaction having been reached, the delegate issued the notices under s 837(2). 28 There is nothing which indicates, in respect of either of the applicants or GWFS, that the delegate reached any higher level of intellectual satisfaction. Whether that level of intellectual satisfaction was reached in respect of the applicants and GWFS more or less contemporaneously, or sequentially, it is still no more than that necessary to activate the obligation under s 837(2). It was necessary to address the individual circumstances of each of them. The three notices to which the applicants have referred indicate the delegate did that. But they do not indicate that the delegate went beyond the point at which s 837(2) came into operation. To arrive at that crest of opinion by successively considering the three briefs, even some time apart, does not support any reasonable belief that the delegate at any time went beyond the crest of opinion at any time. 29 The applicants' counsel contended that the delegate, having described the briefed material as being of such a nature as to require her to comply with s 837(2) in respect of each of them, should "logically" have awaited the outcome of their hearings before considering the content of the GWFS brief. After their hearings, it was argued, she may have concluded there was no foundation for any banning order under s 830 against either of them. By the delegate failing to adopt that course, it was suggested the fair minded observer might think that the delegate had progressed or might have progressed beyond keeping an open mind in relation to the outcome of her consideration of the applicants' positions and had, or might have, taken the step of concluding adversely to their positions and so moved from there to consider the position of GWFS. I do not accept those contentions. It is implicit in them that there was some threshold in her consideration of the circumstances of GWFS which included, or might have included, some positive adverse finding against the applicants. There is no basis for any such understanding in the relevant provisions of the Act. Nor is there any foundation for any such understanding from the terms of the notices to each of the applicants and to GWFS, whether considered alone or together. The applicants did not seek to identify any such terms. 30 It was not necessary for the one delegate to have considered the brief concerning GWFS as well as those concerning the applicants. Indeed, it was not necessary for the one delegate to have considered each of the briefs concerning the applicants. However, the fact that the one delegate considered the briefs concerning each of the applicants, and that concerning GWFS, does not provide any reason for suspecting that she might not perform the hearing functions in relation to each with other than an open mind. The fact that she considered the brief concerning GWFS, and determined to conduct a hearing under s 837(2) by reason of that consideration does not suggest she had a mind foreclosed to a fair and impartial consideration of the applicants' respective circumstances. Indeed, as the material in the three briefs overlapped to a not inconsiderable extent, it would be surprising if the delegate did not reach the same or a similar view in each subsequent consideration of that material as she had reached in consideration of that material in relation to the second applicant. 31 The delegate's chosen course of considering the brief concerning GWFS before having completed the proposed hearings concerning each of the applicants' circumstances also, in my view, cannot either alone or in combination with the other matters of context to which counsel for the applicants referred give rise to any apprehended bias on her part. The fact that the delegate did not defer her consideration of the GWFS brief was of no moment, as the intellectual crest which enlivened s 837(2) in its case was no higher than that which applied in the case of the applicants, and the material in that brief, as counsel for the applicants said, was to a not insubstantial degree common with that in the briefs concerning the applicants. 32 I also do not consider that the re-allocation of the hearing concerning GWFS to a different delegate conveys anything upon which there might be reason to suspect that the delegate conducting the hearings concerning the applicants might not address the issues with a fair and unprejudiced mind. 33 Finally, the applicants' counsel submitted that a compendium of contextual matters added weight or colour to the claims of apprehended bias on the part of the delegate. In my view, the contextual matters referred to do not advance the question whether it is established that a suspicion may reasonably be engendered in the minds of the applicants or in the mind of the public that the delegate may not bring to her consideration of the issues concerning the applicants a fair and unprejudiced mind. Those matters included the applicants having had no dealings with ASIC prior to their dealings concerning the matters the subject of the respective notices, including their dealings with ASIC from February 2002, the unsuccessful attempts to resolve ASIC's concerns without the possibility of banning orders being made under s 830, including certain terms of the attempts in that regard, ASIC's resistance to the applicants' application, the transfer of the GWFS hearing to another ASIC delegate, and the means by which the notices of 6 and 24 June 2002 were allegedly served. Some reference was also made to the matters identified to the first applicant extending beyond those of which he was, to then, aware as being of concern to ASIC. 34 The delegate is not said to have played any part at all in any of those matters prior to her consideration of the respective briefs, nor any direct role in the means by which the notices of 6 and 24 June 2002 were served. (The complaint was that the notices were served by leaving them at a front office, readily perused by office staff). The content of the brief concerning the first applicant is also not a matter in which the delegate was involved; her role was to consider the brief as presented. It cannot be a relevant contextual matter to support a claim of apprehended bias that ASIC, and the delegate, resist the claim. Otherwise, the making of such a claim would result in the potential or actual decision maker being disqualified for having declined to acquiesce in being disqualified from the hearing. I have separately addressed the significance, or lack of significance, of the change of the ASIC delegate in respect of the GWFS hearing.

conclusion 35 For those reasons, in my judgment the application must be dismissed with costs. 36 I announced my decision on 17 September 2002. As then indicated, I direct the time from which any appeal from my decision may be brought do run from the date of these reasons for judgment. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.