Trezona v Australian Securities & Investments Commission

factual circumstances 4 On 30 October 1997, the Australian Securities Commission ('ASC') granted the second applicant a dealer's licence under s 784(5) of the Corporations Law (Cth). The second applicant previously held a dealer's licence under the Securities Industry (Western Australia) Code. The first applicant was an authorised representative of the second applicant and has been a director of the second applicant since its registration as a company. 5 The conditions on the second applicant's licence required a security of $20 000 ('the security deposit') to be lodged with the National Companies and Securities Commission, which requirement continued with the ASC and the respondent. 6 On 4 July 2002 the second applicant lodged with the respondent a notice requesting the revocation of its dealer's licence due to the cessation of its business on 29 June 2002. On 9 July 2002 the second applicant's licence was revoked. 7 On 29 July 2002 an advertisement appeared in the 'West Australian' newspaper noting the second applicant's intention to discharge the security deposit and inviting persons to make claims to the respondent. Upon receiving claims the respondent offered the applicants the opportunity to be heard in respect to the claims. On 17 January 2003 the solicitors for the applicants advised the respondent of their intention to be heard. 8 On 17 January 2003 the first applicant was permanently banned pursuant to s 830(1) of the Corporations Act 2001 from acting as a representative of a dealer or investment adviser ('the banning order'). 9 On or about 13 March 2003, the respondent issued a notice to the applicants convening a hearing ('the security deposit hearing') on 10 April 2003 pursuant to s 51(1) of the ASIC Act to enable submissions to be made as to whether the respondent should make payments of compensation from the security deposit to the claimants. The notice identified the statutory basis upon which the respondent would conduct the security deposit hearing, the procedures to apply and the particulars of the claims against the security deposit. 10 On 4 April 2003 the second applicant, by its solicitors, requested that the security deposit hearing be deferred until a review ('the banning order appeal') of the respondent's decision to permanently ban the first applicant was heard before the AAT. On 9 April 2003 the respondent determined that the security deposit hearing would proceed, in part, on 10 April 2003. A hearing was commenced on 10 April 2003 but not completed. 11 The security deposit hearing was adjourned to recommence on 22 May 2003. 12 On 21 May 2003 the second applicant commenced an application to the AAT seeking a review of the procedure proposed by the respondent for the security deposit hearing; namely, to allow only limited examination of the claimants by the applicants. On 6 November 2003 the AAT determined it had no jurisdiction to hear the application for review. 13 By way of letter dated 21 November 2003 the respondent (in reply to the letter of 11 November 2003 from the applicants' solicitors) confirmed that the security deposit hearing would not be adjourned. The respondent gave notice to the applicants of its intention to recommence the security deposit hearing in January 2004. The applicants' solicitors requested time to prepare for the hearing and accordingly the respondent agreed to provide reasonable notice of the date for the recommencement of the hearing to the applicants. 14 By way of a letter dated 1 April 2004 to the applicants' solicitors, the respondent confirmed that the security deposit hearing would recommence on 13 May 2004. That letter included further statements as part of the respondent's disclosure of the material upon which the respondent intended to rely in making a determination in respect to the security deposit claims. The applicants' solicitors requested that the respondent reconsider its determination to proceed with the security deposit hearing. On 9 April 2004 the respondent confirmed that the security deposit hearing would recommence on 13 May 2004. 15 It is the decision made on 9 April 2004 which the applicants seek to review in this proceeding. The delegate's letter conveying the decision stated that if the applicants commenced proceedings the current security deposit hearing would be stayed pending the application being heard and determined by the Court.

whether decision reviewable 16 The respondent submits that the decision of the delegate not to adjourn the security deposit hearing was not a final, operative decision of a nature that may be reviewed under the ADJR Act. 17 The meaning of the word 'decision' was examined by the High Court in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, Mason CJ, with whom Brennan and Deane JJ agreed stated (at 337 - 338): '… a reviewable 'decision' is one for which provision is made by or under a statute. That will generally, but not always, entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in a course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provided for the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment. Another essential quality of a reviewable decision is that it be a substantive determination. With the exception of s 3(2)(g), the instances of decision mentioned in s 3(2) are all substantive in character. Moreover, the provisions in sub-ss (1), (2), (3) and (5) of s 3 point to a substantive determination. In this context the reference in s 3(2)(g) to 'doing or refusing to do any other act or thing' (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. … If 'decision' were to embrace procedural determinations, there would be little scope for review of 'conduct', a concept which appears to be essentially procedural in character. To take an example, the refusal by a decision-maker of an application for an adjournment in the course of an administrative hearing would not constitute a reviewable decision, being a procedural matter not resolving a substantive issue and lacking the quality or finality. Then it is the 'conduct' of the hearing in refusing an adjournment that is that subject of review. To treat the refusal of the adjournment in this way is more consistent with the concept of 'conduct' than with the notion of a 'decision under an enactment'.' 18 In Geographical Indications Committee v O'Connor (2000) 64 ALD 325 the Full Court considered whether procedural directions made by the AAT constituted a 'decision' for the purposes of the ADJR Act. The Full Court determined the procedural direction did not constitute a decision. The Full Court affirmed at [28] the observations made by Spender J in Federal Commissioner of Taxation v Beddoe (1996) 68 FCR 446 at 453: 'It is in my opinion wholly undesirable that the process contemplated by the AAT Act should be fragmented by applications seeking to challenge intermediate directions or determinations made along the way to reaching an ultimate determination of the issue before the Tribunal, in the same way that this Court should be reluctant to fragment the criminal process by entertaining applications under the ADJR Act in relation to committal proceedings and, in particular, intermediate rulings or determinations made in the course of committal proceedings rather than the ultimate decision to commit.' 19 The Full Court held in Romeo v Asher (1991) 29 FCR 343 at 349 - 350 that: 'While this court has a general supervisory role under the Administrative Decisions (Judicial Review) Act … the court will not, unless compelling circumstances are shown, examine the material before a Committee at any particular stage of a hearing which it is conducting in order to determine, in the abstract, whether, if a particular finding is made, the making of that finding may vitiate the Committee's report because of an absence of procedural fairness. It is only after the findings of the Committee are known that such an inquiry can profitably be undertaken.' 20 The applicants submit that the decision sought to be reviewed was not a matter of procedure because it was a decision not to take into account evidence and the outcome of the proceedings in the AAT. It is said that the decision excluded a relevant consideration, being the credibility of the claimants arising from any examination of the claimants in the AAT banning order appeal. 21 The issue to be determined in the security deposit hearing is whether the claimants have suffered pecuniary loss due to the alleged failure of the first applicant as an agent or employee of the second applicant to carry on the business under the relevant licence adequately or properly: s 786(9) of the Corporations Act 2001 (Cth) and reg 7.3.04(1) of the Corporations Regulations 1990. One of the issues to be determined in the banning order appeal is whether the first applicant had performed efficiently, honestly and fairly the duties of a representative of the second respondent. 22 The applicants submit that in both proceedings the alleged failings of the first applicant in respect of the same clients are in issue. The respondent submits that the issues to be determined at the security deposit hearing are materially different to the issues to be determined by the AAT on the banning order appeal. Nevertheless, the respondent accepts that the five claimants on the security deposit fund will give evidence at both the security deposit hearing and the banning order appeal and that the evidence in the former will in large measure be replicated in the latter, although perhaps to greater length. 23 These considerations cannot assist the applicants in relation to the characterisation of the decision which they seek to review. In my opinion, that decision is clearly not a final or operative and determinative decision. Even looking at the determination in a practical sense and the effect which it might have in denying a forensic advantage through cross-examination of the claimants in the banning order appeal prior to the hearing of the security deposit hearing, it cannot properly be concluded that the decision was anything other than a procedural one. It is an intermediate determination made along the way to reach the ultimate determination required to be made by the security deposit hearing. 24 I agree with the submission for the respondent that, in contrast, the delegate's determination to permit a claim to be paid out of the security deposit will be a final and operative decision that may be reviewed. The decision of the delegate made on 9 April 2004 was not a decision of that character. 25 The security deposit hearing is an administrative hearing conducted in accordance with s 59 of the ASIC Act. The hearing must be conducted with as little formality and technicality, and with as much expedition, as the requirements of the corporations legislation and a proper consideration of the matters before it permit: s 59(1). The hearing is not bound by the rules of evidence: s 59(2). The decision to refuse an adjournment was made in that context. It is clear that the delegate's decision to refuse the adjournment of the security deposit hearing cannot be characterised as a 'decision made under an enactment'. It was not a decision for which specific provision was made by or under a statute. It was a procedural step taken in the context of an administrative hearing conducted in accord with s 59. 26 Therefore I agree with the respondent's submission that the application for review constitutes an attempt to bypass a procedural ruling made by the delegate. It is not open to review under the ADJR Act.

application not made within a reasonable time 27 It is a requirement of the ADJR Act that an application to review a decision must be made within a reasonable time: s 11. It is asserted by the respondent that the application to seek review of the delegate's refusal to adjourn the security deposit hearing was not made within such a period. 28 The unreasonableness in the circumstances are said to arise from the fact that it was on 4 April 2003 the second applicant by its solicitors requested adjournment of the security deposit hearing until the hearing of the banning order appeal. It is submitted that the decision on 9 April 2004 was simply a confirmation of the answer to an identical request being the one first made on 4 April 2003. Additionally it is submitted that the further disclosure of supplementary statements received by the delegate from the applicants did not alter the character of the delegate's confirmation on 9 April 2004 of the refusal to adjourn the security deposit hearing. Given that the present application was not made until 7 May 2004, it is said, that it should not be seen as having been made within a reasonable time. 29 In my opinion the decision made on 9 April 2004 is the relevant decision, although it is to the same effect as the decision previously sought on 4 April 2003. It was a fresh decision. In terms of the application of the requirement for filing within a reasonable time it should not be characterised as a continuation of the prior decision. In my view the application does not fail for want of compliance with s 11 of the ADJR Act.

reviewable conduct 30 The applicants submit that refusal to grant an adjournment can, in some circumstances, be a reviewable conduct: Beale v Administrative Appeals Tribunal (1998) 82 FCR 132. It is said that in the present case the refusal must be seen in context and bearing in mind its consequences and that in this light it is to be seen as not merely a matter of procedure but a determination that affects the ability of the applicants to fairly participate in the security deposit hearing: Beddoe; Australian Postal Commission v Hayes (1989) 23 FCR 320; Geographical Indications Committee v O'Connor. 31 I have already expressed the opinion that I do not regard the decision refusing the adjournment made on 9 April 2004 to be anything other than the determination of a matter of procedure. The same reasoning as previously stated is applicable to the review sought in respect of conduct.

Conclusion 32 For these reasons I consider that the application for review should be dismissed. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson.

Solicitor for the Respondent: Australian Securities and Investments Commission