Williams v Companies Auditors Disciplinary Board [2025] FCA 629

3 BACKGROUND

4 THE CHALLENGE TO THE BOARD'S FINDING THAT MR WILLIAMS HAD NOT ADEQUATELY PERFORMED HIS DUTIES AS AN AUDITOR

4.1 The issues

4.2 The Board's understanding of Mr Williams' responsibility as the Engagement Partner (Grounds 3(a) and (b) (the Audit Team Grounds))

4.2.1 Relevant findings by the Board

4.2.2 No error is established in the Board's understanding of Mr Williams' responsibility as the Engagement Partner

4.3 The Legal Unreasonableness Ground (Ground 3(e))

4.3.1 The issues

4.3.2 Relevant principles

4.3.3 Is the Board entitled to rely on its own expertise (legal unreasonableness issues 1 and 2)?

4.3.4 Mr Rea's evidence (legal unreasonableness issue 3)

4.3.5 Evidence in relation to quality control framework (legal unreasonableness issue 4)

5 THE CHALLENGE TO THE BOARD'S DECISION TO CANCEL MR WILLIAMS' REGISTRATION RATHER THAN IMPOSE A SUSPENSION

5.1 Relevant principles

5.2 Alleged failure to take into account Mr Williams' Engagement Partner Response (Grounds 4(a) and (b))

5.3 Alleged failure to take into account Mr Williams' experience and reputation (Ground 4(c))

5.4 Alleged failure to take into account Mr Williams' Limited User/Limited Purpose Response and/or the Subsequent Maddison Audit response (Grounds 4(d) and (e))

5.5 Did the Board apply a presumption of cancellation (Ground 4(f))?

6 THE CHALLENGE TO THE BOARD'S COSTS DECISION (GROUNDS 5 AND 6)

7 CONCLUSION

1. The applicant, Mr Reginald Lance Williams, was a registered company auditor under the Corporations Act 2001 (Cth). On 7 December 2012, Mr Williams signed an unqualified audit opinion on behalf of Williams Partners Independent Audit Specialists (WPIAS) for financial statements of the unregistered managed investment scheme known as the LM Managed Performance Fund (LM) for the financial year ending 30 June 2012 (the Audit).
2. The first respondent, the Companies Auditors Disciplinary Board, is established by the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and must, by operation of s 203 of the ASIC Act, include members who have expertise in accounting and business. Under sub-s 1292(1)(d)(i) of the Corporations Act, the Board has power, among other things, to cancel or suspend a person's registration as an auditor if it is satisfied on an application by the Australian Securities and Investments Commission (ASIC) or the Australian Prudential Regulation Authority (APRA) that the person failed to carry out, or perform adequately or properly, the duties of an auditor. As I shortly explain, it is well-established that professional standards are relevant to the scope of sub-s 1292(1)(d)(i): Dean-Willcocks v Companies Auditors and Liquidators Disciplinary Board [2006] FCA 1438; (2006) 59 ACSR 698 at [26] (Tamberlin J).
3. On 5 December 2018, the Board cancelled Mr Williams' registration as a company auditor under s 1292 of the Corporations Act (the Cancellation Decision) on the ground that it was satisfied that Mr Williams had not adequately and properly carried out or performed his duties as an auditor with respect to the Audit. The Board further ordered under s 223 of the ASIC Act that Mr Williams pay the costs of the second respondent in this proceeding, ASIC, fixed in the sum of $200,000 (the Costs Decision). The Board gave extensive reasons (the Cancellation Reasons) for the Cancellation Decision and separate reasons for the Costs Decision (the Costs Reasons).
4. By his amended originating application for judicial review, Mr Williams seeks declarations that the Cancellation Decision and the Costs Decision are invalid for jurisdictional error, together with injunctive relief enjoining ASIC from enforcing the Costs Decision as a debt in the District Court of Queensland, on the following grounds.

(1) In deciding to cancel Mr Williams' registration on the ground that he had failed to carry out or perform adequately and properly the duties of an auditor in relation to the Audit:

(a) the Board acted on an incorrect construction of sub-s 1292(1)(d)(i) of the Corporations Act by cancelling Mr Williams' registration for work carried out by other persons (Ground 3(a)); and

(b) the Board failed to take into account relevant and material considerations, being Mr Williams' responsibilities as engagement partner and the fact that the majority of work was carried out by other persons (Ground 3(b));

(c) the Board's decision lacked an evident and intelligible justification and was therefore legally unreasonable (Ground 3(e)):

(i) in the absence of expert evidence from a registered company auditor either with practical experience acting as an engagement partner, or in auditing substantial pooled mortgage schemes, as to what a reasonably competent auditor would have done; and/or

(ii) the Board was not entitled to rely on its own specialist expertise and the expert evidence of Mr Chris Rea was insufficient; and/or

(iii) the Board did not account for expert evidence that was tendered in relation to the firm's quality control framework.

(2) In the alternative, in deciding to cancel Mr Williams' registration, rather than suspending him for a limited period or dealing with him under s 1292(9) of the Corporations Act:

(a) the Board failed to take into account relevant and material considerations, namely:

(i) the facts underpinning what the Board described as Mr Williams' "Engagement Partner Response" (Ground 4(b)) and "Limited User/Limited Purpose Response" and/or the Subsequent Maddison Audit response (Ground 4(d));

(ii) Mr Williams' professional qualifications, experience and reputation as a registered auditor (Ground 4(c)); and/or

(b) ASIC applied a presumption of cancellation contrary to law (Ground 4(f)).

(3) The Costs Decision is invalid because:

(a) the Cancellation Decision is invalid (Ground 5); or, in the alternative,

(b) the Board had no power to award costs of the application and was only entitled to award the costs of the hearing (Ground 6).

1. Mr Williams abandoned Grounds 3(c)-(d) and Ground 7 of his originating application for judicial review. Further, Mr Williams emphasised that, if he is successful in his application for judicial review, he does not seek relief reinstating him as an auditor. Nor does he seek an order in the nature of mandamus remitting the matter to the Board for redetermination according to law. Rather, if he obtained declarations as to the invalidity of the Cancellation Decision and therefore of the Costs Decision, the District Court proceedings to enforce the amount owing under the Costs Decision would have to be dismissed because there would be no debt owing to the Commonwealth as alleged in Mr Williams' defence in that proceeding.
2. For the reasons set out below, the application must be dismissed. Ultimately, no error has been established in either the Cancellation Decision or the Costs Decision.
3. Finally, I note that ASIC contended that the grant of declaratory relief should be refused in any event given, among other things, the extent of the delay by Mr Williams in bringing this application (five years after the relevant decisions were made on 5 December 2018) and the alleged lack of an adequate explanation for the delay which raised, among other things, complex jurisdictional issues. However, it is ultimately unnecessary to determine these issues given my conclusions on the substance of the application.

1. The proceedings are brought pursuant to s 39B of the Judiciary Act 1903 (Cth) and ss 21 and 22 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) or, in the alternative, under s 1337B of the Corporations Act conferring jurisdiction on the Federal Court with respect to civil matters arising under the Corporations Act.
2. However, as ASIC submitted, the Court has jurisdiction under s 1337B(1) of the Corporations Act which operates to the exclusion of s 39B of the Judiciary Act: Panganiban v Australian Securities and Investments Commission [2016] FCA 510; (2016) 338 ALR 119 at [32] (Bromwich J); CMW23 v Companies Auditors Disciplinary Board [2024] FCA 407 at [5] (Rofe J). As the Full Court held in AgriWealth Capital Ltd v Australian Financial Complaints Authority Ltd [2023] FCAFC 118; (2023) 299 FCR 319 at [20]:
   1. By force of s 1337B(1) of the Corporations Act, the Federal Court has civil jurisdiction in "civil matters arising under the Corporations legislation". The "Corporations legislation" is defined in a way that includes the Corporations Act itself. Division 9.6A of the Corporations Act, in which s 1337B is found, operates to the exclusion of s 39B of the Judiciary Act 1903 (Cth): s 1337A(2)(b). Section 1337B is therefore the only potential source of jurisdiction. However, it runs in parallel with s 39B(1A)(c) in that it confers jurisdiction in matters "arising under" a Commonwealth law. Conferral of federal jurisdiction in these terms is authorised by s 76(ii) of the Constitution, which refers to matters "arising under any laws made by the Parliament".
3. ASIC also (correctly) did not dispute the Court's power to grant declaratory relief under s 21 of the FCA Act. I also accept that the source of power for the Court to grant the injunction sought by Mr Williams is s 23 of the FCA Act, which permits the Court to "make orders of such kinds ... as the Court thinks appropriate": cf Rush v Nationwide News Pty Ltd (No 9) [2019] FCA 1383 at [5] (Wigney J).
4. Finally, it was common ground that the fact that declaratory relief is sought (as opposed to prerogative or constitutional writs, or relief under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act)) does not alter the fact that the proceeding is in the nature of judicial review, and that the onus therefore lies on Mr Williams to identify jurisdictional error: Buttrose v Attorney-General of New South Wales [2015] NSWCA 221; (2015) 324 ALR 562 at [15] (Beazley P and Leeming JA).

1. Mr Williams was a company auditor, first registered in 1996. As explained at the outset, on 7 December 2012, Mr Williams signed an unqualified audit opinion on behalf of his firm, WPIAS, for financial statements of LM for the financial year ending 30 June 2012 (the 2012 LM Audit Opinion). The financial statements comprised the directors' annual report together with the audited consolidated financial statements of LM and its controlled entities for the financial year ending 30 June 2012 (the 2012 LM Financial Statements).
2. On 4 April 2017, ASIC lodged an application with the Board under s 1292 of the Corporations Act to cancel Mr Williams' registration as an auditor (Board Proceedings).
3. The Board Proceedings proceeded with a hearing of preliminary issues on 6 September 2017, ASIC's opening submissions on 7 and 8 September 2017, evidence from 5 to 9 March 2018, and argument as to costs on 29 October 2018. By a decision given on 5 December 2018, the Board cancelled Mr Williams' registration as a company auditor for reasons I summarise shortly below. The Board also ordered that Mr Williams pay the costs of the proceedings, fixed in the amount of $200,000. I consider relevant aspects of the Board's Costs Reasons in considering Mr Williams' separate challenge to the costs order.
4. On 5 December 2018, Mr Williams filed review proceedings in the former Administrative Appeals Tribunal (AAT) in relation to the Cancellation Decision and the Costs Decision. In 2019 and early 2020, Mr Williams and ASIC filed expert evidence in the AAT proceedings. However, between March 2020 and March 2021, the AAT proceedings were delayed by reason of the COVID-19 pandemic.
5. In or around April 2021, Mr Williams asked his wife, Mrs Caroline Williams, to contact ASIC to discuss a resolution of the AAT proceedings. On 15 June 2021, at a directions hearing before the AAT, ASIC indicated that it would review the Costs Decision. In response, Mrs Williams stated that Mr Williams would withdraw his appeal in the AAT on that basis. On 16 June 2021, Mr Williams then withdrew his application to the AAT. However, Mr Williams contends that if he had known that ASIC may pursue the Costs Decision regardless, he would not have withdrawn his application to the AAT. Mr Williams was not cross-examined on that evidence, and I accept that this was in fact his view. Nonetheless, that does not mean that his views in this regard were objectively reasonable.
6. Following Mr Wiliams' withdrawal of the application to the AAT, ASIC exchanged correspondence with Mr Williams and Mrs Williams about the payment of ASIC's costs. No proposal as to the payment of costs was provided by Mr Williams and, on 31 May 2022, ASIC informed Mr Williams that it intended to enforce the Costs Decision.
7. On 27 February 2023, ASIC commenced proceedings in the District Court to enforce the Costs Decision as a debt. In his defence filed in the District Court on 30 March 2023, Mr Williams denied the debt on the basis that the Costs Decision was invalid and, by way of a counterclaim, sought a declaration that no debt is therefore currently due to the Commonwealth. As such, in the District Court, Mr Williams sought to attack the validity of the Cancellation Decision and the Costs Decision collaterally.
8. On 5 June 2023, ASIC wrote to Mr Williams' solicitors contending that the District Court did not have jurisdiction to consider the counterclaim pursuant to s 9(1) of the ADJR Act.
9. Ultimately, the parties were agreed that the District Court did not have jurisdiction to determine the validity of the debt and counterclaim. As a consequence, on 15 December 2023, Mr Williams instituted the present proceedings which seek directly to attack the validity of the Board's Cancellation Decision and the Costs Decision. If successful, I do not understand it to be in issue that this would mean that no debt was due to the Commonwealth, and that the District Court proceedings would have to be dismissed.

4. THE CHALLENGE TO THE BOARD'S FINDING THAT MR WILLIAMS HAD NOT ADEQUATELY PERFORMED HIS DUTIES AS AN AUDITOR

1. Mr Williams accepted before the Board and in these proceedings that he was the "Engagement Partner" for the Audit within the meaning of Australian Auditing Standard ASA 220. However, Mr Williams contended that the Board erred in law in treating him as "fully vicariously responsible for work done by others in the audit team, and to discipline him on that basis, without any consideration of the proper scope of his supervisory responsibilities, or whether he had complied with them". This contention would seem to differ from what the Board termed Mr Williams' "Engagement Partner Response", namely, that Mr Williams shared responsibility as the Engagement Partner with Ms Andrea Blank in her alleged role as "Lead Engagement Partner" and therefore was not responsible for the performance of audit work carried out by Ms Blank.
2. The challenge to the Board's finding that it was satisfied that Mr Williams had not adequately and properly carried out or performed his duties as an auditor, which I will address first, was pleaded in two ways:

(1) Ground 3(a): the Board erred in its construction of s 1292 of the Corporations Act:

(a) by incorrectly acting on the basis that Mr Williams' registration could be suspended or cancelled for work carried out by other persons by reason only of his role as the Engagement Partner; and

(b) in failing to consider whether Mr Williams had complied with his obligations as the Engagement Partner under paragraph 15 of ASA 220;

(2) Ground 3(b): the Board erred in failing to take into account relevant and material considerations, being:

(a) Mr Williams' responsibilities as the Engagement Partner as set out in paragraph 15 of ASA 220;

(b) the absence of any allegation by ASIC in its SFIC that Mr Williams had failed to satisfy his duties as the Engagement Partner under paragraph 15 of ASA 220 with respect to the work undertaken by others;

(c) the fact that Ms Andrea Blank, who was the "Lead" or "Field" Partner, did the majority of the work on the Audit (allegedly 51.6% of the time recorded as opposed to 18.9% recorded by Mr Williams) and had the key duties of:

overall planning / performance of audit / monitoring of other team members / review of audit programs and supporting work papers / engagement of experts, if considered necessary / preparation of work papers, if considered necessary / bringing matters of significant to attention of EP and EQCR / prepare / review audit report for sign of by EP.

(d) the fact that Ms Lee-Ann Dippenaar, who was a registered company auditor, in her capacity as the "Review Auditor" for the Audit, carried out the quality control review on the Audit workpapers.

1. It is convenient to refer to Grounds 3(a) and (b) as Mr Williams' Audit Team Grounds.
2. Further or in the alternative, Mr Williams contended that the Board's decision lacked an evident and intelligible justification by reason of the absence of expert evidence and the evidence of a Quality Control Review conducted by a reviewer (who was an "external, independent and experienced registered company auditor") from CPA Australia in August 2013 (Ground 3(e)). It is convenient to refer to this as the Legal Unreasonableness Ground.
3. Finally, I note that in his supplementary submissions at [19] filed after the hearing on 11 November 2024, Mr Williams reformulated Ground 3(b) in submitting that the Board failed to take into account as a mandatory relevant consideration the fact that an Engagement Partner is permitted to "delegate" their work to their audit team under ASA 220. However, no application was made to amend the amended originating application to reflect this new allegation, and, in any event, the contention is misconceived as I explain later.

4.2 The Board's understanding of Mr Williams' responsibility as the Engagement Partner (Grounds 3(a) and (b) (the Audit Team Grounds))

1. The Board, which was comprised of three panel members, considered that the first relevant question was whether the matters alleged by ASIC regarding Mr Williams' conduct of the Audit were duties of an auditor within sub-s 1292(2)(d)(i) of the Corporations Act.
2. First, the Board noted that Mr Williams signed the 2012 LM Audit Opinion as the Engagement Partner which represented that:

(1) the financial statements accorded with the Corporations Act, the Auditing Standards and the Corporations Regulations 2001 (Cth); and

(2) they gave a true and fair view of LM's financial position and were compliant with international financial reporting standards.

1. The Board also found that the engagement letter which formed the contractual basis for the performance of the Audit by WPIAS stated that the Audit would be conducted in accordance with the Corporations Act and the Auditing Standards.
2. The Board referred to the fact that ASIC's SFIC characterised the conduct alleged against Mr Williams as falling within sub-s 1292(1)(d)(i) of the Corporations Act. Referring to earlier decisions by the Board that the reference to "the duties of an auditor" under sub-s 1292(1)(d)(i) encompassed both the general law duties of an auditor and an auditor's statutory duties, the Board found that it was satisfied that Mr Williams was carrying out duties within the meaning of that subsection. In this regard, the Board noted that ASIC relevantly alleged that various requirements in the Auditing Standards were not performed, or not performed adequately and properly, within the meaning of sub-s 1292(1)(d)(i). The Board also found that the Auditing Standards issued by the Australian Auditing Standards Board apply to audits whether or not they were conducted under the Corporations Act and that, with respect to audits of financial reports conducted under the Corporations Act, the Auditing Standards applied because they are issued as legislative instruments under that Act. It further found that, as a member of CPA Australia Ltd when he conducted the Audit, Mr Williams was required to comply with APES 210 issued by the Accounting and Ethical Standards Board (APESB) which in turn required him to comply with the Auditing Standards.
3. The Board therefore concluded at [94] of the Cancellation Reasons that it was satisfied that "the prevailing provisions of the Auditing Standards and the Act at the relevant time in 2012 governed Mr Williams' performance of the 2012 LM Audit and are appropriate sources from which his obligations when performing that audit arose within the meaning of section 1292(1)(d)(i) [of the Corporations Act]".
4. Secondly, under the heading "The Board's task under section 1292", the Board addressed the nature of the task to be performed by it in considering an application under that provision. After referring among other things to the decision in Albarran v Members of the Companies Auditors and Liquidators Disciplinary Board [2007] HCA 23; (2007) 231 CLR 350, the Board found at [98]-[99] of the Cancellation Reasons that:

1. Compliance with the prevailing Auditing Standards requirements in the 2012 LM Audit set or alternatively reflected a relevant professional standard to which the Panel might have regard when evaluating the adequacy and propriety of Mr Williams' performance of his audit duties under section 1292(1) of the Act. 2. In making our "evaluative and subjective determination" of the adequacy and propriety of the carrying out or performance of his duties, a relevant general benchmark against which to evaluate the level and sufficiency of Mr Williams' performance of his duties in this matter would be a reasonably competent registered auditor performing the audit of a similar financial report in similar circumstances at a similar time to Mr Williams' performance of the 2012 LM Audit. In our view, adequate performance of relevant duties by a reasonably competent registered auditor would be demonstrated by:

(a) Compliance with current relevant requirements of the Auditing Standards. Those standards, which are principles based, are designed to be applied by an auditor through the exercise of professional judgement and an element of the Panel's assessment of whether there has been adequate performance of this aspect of the auditor's duties will therefore involve an element of qualitative evaluation. > > (b) Compliance of the entities reporting in its financial statements with relevant applicable legislative requirements and AASB requirements. > > (c) Performing the audit engagement consistently with any specific representations with respect to its performance made by the auditor by way of, for example, an audit engagement letter. > > (d) Performing duties in an audit engagement at a standard consistent with the relevant Auditing and Assurance Standards Board ("AUASB") guidelines, pronouncements and/or bulletins published from time to time.

1. Thirdly, the Board addressed the first of four matters which arose from Mr Williams' response to the proceedings and his evidence including, relevantly, what was described as his "Engagement Partner Response". By this response, Mr Williams maintained that the role he performed, and the actions he took as Engagement Partner, in relation to the Audit satisfied his obligations as a registered auditor to carry out his duties adequately and properly within the meaning of sub-s 1292(1)(d)(i) of the Corporations Act when considered in the context of the quality control framework at WPIAS. His evidence about that framework was that, as the Engagement Partner, he shared responsibility for the Audit with Ms Blank who he described as the "Lead" Partner.
2. The Board, however, found at [103] of the Cancellation Reasons that the APESB pronouncements and the Auditing Standards in place at the relevant time "addressed the matter of responsibility for audit engagements and established a clear framework of responsibility for a single auditor carrying out the role of engagement partner with respect to an audit" (emphasis added). In support of this view, the Board referred to the following:

(1) the definition and expectations of the Engagement Partner in APES 320 Quality Control for Firms at AUST 2.1(f), namely:

Engagement Partner means the Partner or other person in the Firm who is responsible for the Engagement and its performance, and the report that is issued on behalf of the Firm, and who, where required, has the appropriate authority from a professional, legal or regulatory body.

(Emphasis added.)

(2) the context in which the terms Auditor and Engagement Partner are used within the Auditing Standards as set out in ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards at paragraph 13(d), namely:

Auditor means the person or persons conducting the audit, usually the engagement partner or other members of the engagement team or, as applicable, the firm. Where an Auditing Standard expressly intends that the engagement partner fulfill a requirement or responsibility, the term "engagement partner" rather than auditor is used.

(3) the leadership responsibilities for Quality of Audits set out in ASA 220.8, namely "[t]he engagement party shall take responsibility for the overall quality on each audit engagement to which that partner is assigned" (emphasis added); and

(4) the responsibilities of the Engagement Partner set out in ASA 220.15-.22 in relation to:

(a) direction, supervision and performance of the audit;

(b) reviews of the audit documentation;

(c) consultation;

(d) engagement quality control review; and

(e) differences of opinion.

1. The Board noted at [112] of the Cancellation Reasons that, before conceding that he was the Engagement Partner, Mr Williams had argued that s 324AF of the Corporations Act expressly permitted joint/shared auditor responsibility. However, the Board found that those statutory provisions are not relevant to a consideration of the responsibility of the Engagement Partner on an audit. Significantly, at [113] of the Cancellation Reasons, the Board further found that:
   1. On day 9 of the hearing, Mr Williams ultimately admitted that he was the only Engagement Partner for the 2012 LM Audit and as the Engagement Partner he was responsible for the appropriate performance of the 2012 LM Audit in accordance with the relevant Auditing Standards, regardless of who at WPIAS may have performed the audit work the subject of ASIC's allegations. The fact that Ms Blank and Ms Dipenaar were also registered auditors did not alter or diminish Mr Williams' responsibility as the Engagement Partner for the overall quality and efficacy of the audit work performed in the 2012 LM Audit, nor his duty to ensure that he met the requirements of the Auditing Standards when performing his role as the Engagement Partner on the 2012 LM Audit.
2. Nonetheless, following this concession, the Board found that in cross-examination Mr Williams continued to give answers which, in the Board's view, "demonstrates that Mr Williams did not have a proper understanding of the scope of his responsibilities as the Engagement Partner having regard to the auditing standards we have referred to even after he had conceded the point". Accordingly, the Board observed at [117] of the Cancellation Reasons that:
   1. The reasons we have set out above represent the basis for our view, had we been required to make a finding, that as the Engagement Partner in the 2012 LM Audit, Mr Williams was responsible for the overall quality and sufficiency of the audit work performed and for the audit opinion that was issued. This responsibility was a relevant duty that arose within the meaning of section 1292(1)(d)(i) of the Act. In our view this is a very significant responsibility and inadequate performance of that role has a highly pervasive potential detrimental impact on audit quality.
3. It is clear, in other words, that the Board found that:

(1) Mr Williams had conceded that he was the only Engagement Partner and that he was responsible for the appropriate performance of the Audit in accordance with relevant Auditing Standards; and, as a result,

(2) it was unnecessary for the Board to make a finding to that effect even though, if it had been necessary, it would have done so.

1. In this regard, I note that Mr Williams alleged in his supplementary reply submissions (filed after the hearing on 27 November 2024) that the Board was wrong to find that he had abandoned the Engagement Partner Response. In support of this contention, Mr Williams referred to his closing submissions before the Board where he stated that he "was probably conveying our firm culture as opposed to what we did on the specific engagement" and that "we were equal people, equal partners on all engagements that we were assigned to". However, at the same time, in his closing submissions to the Board, Mr Williams also said that "I was not trying to shirk my responsibilities as an engagement partner" and "I was the engagement partner for the MFP audit and, therefore, I took ultimate responsibility for the audit opinion". It was therefore plainly open to the Board to find, having regard to Mr Williams' evidence and closing submissions, that Mr Williams had in fact abandoned his Engagement Partner Response.
2. In any event, the Board's construction of Mr Williams' duties as auditor was plainly correct for the reasons set out below.

4.2.2 No error is established in the Board's understanding of Mr Williams' responsibility as the Engagement Partner

1. Mr Williams submitted that sub-s 1292(1)(d) of the Corporations Act is engaged only if "the person" has failed to carry out, or to perform adequately and properly, certain duties or functions, or they are otherwise not a fit and proper person to remain registered as an auditor. According to Mr Williams, it follows from the use of the words "the person" that the Board's disciplinary jurisdiction was confined to consideration of Mr Williams' own conduct, and "there was no scope within the terms of the statute to discipline Mr Williams vicariously for work done by, or for the conduct of, others". In this regard, Mr Williams drew a distinction between what he described as "absolute vicarious liability" in a civil case where a partner and the firm are liable in civil proceedings, on the one hand, and disciplinary proceedings. As to the latter, he submitted that "when you're talking about disciplining someone, you're disciplining them for their conduct, for their work and their work only". Accordingly, while Mr Williams accepted, for example, that an engagement partner could potentially be disciplined for a failure to properly supervise people working under their supervision, he submitted that an engagement partner could not be disciplined because of deficiencies in the work of those working under them.
2. For the reasons outlined below, that construction of sub-s 1292(1)(d) of the Corporations Act must be rejected. Accordingly, Ground 3(a) must be dismissed. It follows that Ground 3(b) must also be dismissed. The Board did not fail to take into account the division of tasks between Mr Williams, Ms Blank and Ms Dippenaar in the Audit. Rather, it found that the division of tasks was not relevant to the question of whether Mr Williams was responsible for the Audit by reason of being the Engagement Partner.
3. First, s 1292 of the Corporations Act relevantly provides:

(1) The Board may, if it is satisfied on an application by ASIC or APRA for a person who is registered as an auditor to be dealt with under this section that, before, at or after the commencement of this section:

...

(d) the person has failed, whether in or outside this jurisdiction, to carry out or perform adequately and properly:

(i) the duties of an auditor; or

(ii) any duties or functions required by an Australian law to be carried out or performed by a registered company auditor;

or is otherwise not a fit and proper person to remain registered as an auditor;

by order, cancel, or suspend for a specified period, the registration of the person as an auditor.

1. As ASIC submits, sub-s 1292(1)(d)(i) of the Corporations Act plainly does not require that the person the subject of the disciplinary application be the person who performed each piece of work in the relevant audit. Nor does it purport to limit or prescribe the duties of an auditor. Rather, it directs attention to the questions: what are the duties of an auditor; and is the Board satisfied that the auditor carried out, or performed adequately and properly, those duties. The content of the duties of an auditor, in other words, is to be found elsewhere.
2. Secondly and in line with the Board's understanding (as explained at [34] above), it is well established that the duties of an auditor for the purposes of sub-s 1292(1)(d)(i) of the Corporations Act are not limited to statutorily imposed duties, but extend to professional standards. Thus, in Dean-Willcocks, in the context of considering the relevance of professional standards to then sub-s 1292(2)(d)(ii) of the Corporations Act, Tamberlin J held at [26] that:
   1. There is nothing in the language of s 1292(2)(d)(ii) which excludes regard to professional standards and codes when deciding whether the performance is a proper and adequate exercise of the office. The reference to "proper" and "adequate" invites the testing of performance against a relevant standard or benchmark of performance. The interpretation advanced for the applicant, in my view, is too narrow in requiring the identification of a specific duty directly imposed by legislation. The level of performance called for is that of "adequacy." The standard is that the duty must be performed "properly". The provision is designed to enable a Board representative of the commercial and accounting communities to consider whether the function has been adequately and properly carried out. To assess this, it is permissible, in my view, to have regard to the standards operative in the relevant sphere of activity.
3. While sub-s 1292(2)(d)(ii) of the Corporations Act has since been repealed, it is relevantly identical to sub-s 1292(1)(d)(i) which applied to liquidators. As such, Tamberlin J's construction of that provision is equally applicable to sub-s 1292(1)(d)(i).
4. Tamberlin J's observations at [26] of Dean-Willcocks were subsequently quoted with approval in Albarran at [18] and [20] (Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ) on which the Board relied; see also Re Vouris [2003] NSWSC 702; (2003) 47 ACSR 155 at [100], [103] (Campbell J); and Goodman v Australian Securities and Investments Commission [2004] FCA 1000; (2004) 50 ACSR 1 at [26]- [27] (Branson J).
5. Thirdly, the standards relevant to sub-s 1292(1)(d)(i) of the Corporations Act include, as the Board found, ASA 200 entitled "Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards", issued by the Auditing and Assurance Standards Board (AUASB) pursuant to s 227B of the ASIC Act and s 336 of the Corporations Act.
6. The Explanatory Statement to ASA 200 (October 2009) explains that the AUASB's Strategic Direction provides, among other things, that the AUASB is to develop Australian Auditing Standards that "have a clear public interest and are of the highest quality" and use the International Auditing and Assurance Standards Board's International Standards on Auditing (ISA) as the underlying standards. Further, the Authority Statement at the commencement of ASA 200 provides that the Auditing Standard "is to be read in conjunction with ASA 101 Preamble to Australian Auditing Standards" which sets out the AUASB's intentions on how the Auditing Standards "are to be understood, interpreted and applied": see also cl 7 of ASA 101. Among other things, cl 9 of ASA 101 provides that an auditor "shall apply the mandatory components of the Australian Auditing Standards when conducting an audit or review in accordance with those Standards" which include definitions and requirements in those Standards. Clause 10 of ASA 101 also requires an auditor to "consider the whole text of an Auditing Standard to understand, interpret and apply the mandatory components" (emphasis added).
7. As the Auditing Standards constitute legislative instruments under the Legislative Instruments Act 2003 (Cth), they must be construed in accordance with the Legislation Act 2003 (Cth) and the Acts Interpretation Act 1901 (Cth) and ordinary principles of statutory construction: Vincentia MC Pharmacy Pty Ltd v Australian Community Pharmacy Authority [2020] FCAFC 163; (2020) 280 FCR 397 at [43], [45] (Perry and Stewart JJ).
8. Relevantly for present purposes, ASA 220.8 provides that the Engagement Partner, who is defined in ASA 220.7(a) as the person "responsible for" the engagement, its performance and the auditor's report, "shall take responsibility for the overall quality on each audit engagement to which that partner is assigned" (emphasis added). That responsibility in turn flows from the leadership role of the Engagement Partner in the performance of the audit as reflected in the title to ASA 220.8, "Leadership Responsibilities for Quality on Audits". This leadership role is confirmed by the comprehensive responsibilities imposed on the Engagement Partner as spelt out in ASA 220.12-18 with respect, inter alia, to the competence of the engagement team members, and for the direction, supervision and performance of the audit and reviews. Similarly, APES 320 which was then entitled "Quality Control for Firms" defines an Engagement Partner as the person "responsible for the Engagement and its performance, and the report that is issued on behalf of the Firm".
9. Thus, in their terms, neither ASA 220 nor APES 320 limit the Engagement Partner's responsibility for the audit to work that was personally undertaken by the Engagement Partner in the conduct of the audit, whether by way of supervision, review of documents, or otherwise. Rather, they impose "responsibility" on the Engagement Partner for the audit engagement and its performance, and the report. As such, the intention is plain: to impose responsibility on the Engagement Partner for the audit overall irrespective of who conducted particular tasks in the course of the audit in recognition of the Engagement Partner's leadership role. Accordingly, to describe this construction as effectively no more than an attempt to fix the Engagement Partner with vicarious liability for the acts of others fails to appreciate the significance and nature of the Engagement Partner's leadership responsibility and attempts to import tortious notions of vicarious liability into a statutory scheme to which they have no apparent relevance.
10. Nor can Mr Williams' attempts to confine the concept of "responsibility" to work actually undertaken by the Engagement Partner be reconciled with the words of ASA 220 and APES 320. That construction fails to read ASA 220 as a whole, looking instead to read down an Engagement Partner's overall responsibility by reference to specific responsibilities. There is nothing in the terms of ASA 220 which supports the notion that, by delegating tasks within the audit to other persons, an Engagement Partner could be absolved of personal responsibility for the audit overall. To the contrary, as ASIC submits, that construction "would see the senior partner supervising an audit engagement shirk the very responsibility imposed by ASA 220 and APES 320" and thereby undermine the public interest in ensuring that audits are of the highest quality by rendering the Engagement Partner accountable for the audit as a whole.
11. Mr Williams also relied upon a revision in 2020 to ISA 220 (on which ASA 220 is based) entitled "Quality Management for an Audit of Financial Statements" which was intended to clarify ambiguities in the interpretation of ISA 220. Specifically, ISA 220 was amended to state at [9] that:
    1. The term, "the engagement partner shall take responsibility for..." is used for those requirements that the engagement partner is permitted to assign the design or performance of procedures, tasks or actions to appropriately skilled or suitably experienced members of the engagement team. For other requirements, this ISA expressly intends that the requirements or responsibility be fulfilled by the engagement partner and the engagement partner may obtain information from the firm or other members of the engagement team.
12. However, nothing in the amended ISA 220 detracts from the Engagement Partner's responsibility over the procedures, tasks or actions that the Engagement Partner delegates to others. To the contrary, the passage emphasises that the intention underlying the use of the phrase that the "engagement partner shall take responsibility for" in the ISA is precisely to ensure that the Engagement Partner remains ultimately responsible notwithstanding that particular tasks may have been assigned to others.
13. Mr Williams also sought to rely upon the following authorities in other disciplinary contexts in support of his submission that he, as Engagement Partner, was responsible only for those tasks undertaken directly by him: Law Society of New South Wales v Foreman (1991) 24 NSWLR 238; Rendale Pty Ltd v Metropolitan Licensing Inspector (Unreported, 17 June 1988, NSWSC, Smart J); and Reynolds & Co Pty Ltd v Australian Stock Exchange Ltd [2003] NSWSC 33; (2003) 44 ACSR 612. However, those cases are distinguishable as they concerned other disciplinary schemes and did not address a like provision which imposed overall responsibility for the performance of a professional function.
14. It follows for these reasons that, having found that Mr Williams was the Engagement Partner (as Mr Williams ultimately conceded), there is no error in the Board's finding that Mr Williams "was responsible for the overall quality and sufficiency of the audit work performed and for the audit opinion that was issued". Ground 3(a) must therefore be dismissed.
15. It necessarily follows that Ground 3(b), being the alleged failure to have regard to the role played by others in the Audit on the basis that it was a mandatory relevant consideration, must equally fail. Similarly, Mr Williams' contention in post-hearing submissions that the Board was required, as a mandatory relevant consideration, to have regard to the implicit capacity of the Engagement Partner to "delegate" tasks to other members of the audit team under ASA 220 must also fail. Even accepting that the concept of "delegation" is appropriate in this context, it would undermine ASA 220.8 to suggest that the Engagement Partner's overall responsibility for the Audit could be delegated.

4.3 The Legal Unreasonableness Ground (Ground 3(e))

1. By Ground 3(e), Mr Williams contends that the Board's findings:

... lacked an evident and intelligible justification:

(i) in the absence of any evidence from a registered company auditor with practical experience acting as an engagement partner, further and in the alternative, in auditing substantial pooled mortgage schemes, as to:

(1) the audit evidence that a reasonably competent auditor would have identified as being required to support an unqualified audit opinion of the financial report of the MPF for the year ended 30 June 2012; and

(2) the matters and concerns that a reasonably competent auditor would have identified, applying the required level of professional scepticism, when carrying out the Audit;

(ii) in the presence of evidence of the findings of a Quality Control Review conducted in August 2013 under APES 320 by an external, independent and experienced registered company auditor, who specifically selected and reviewed the Applicant's files in relation to the Audit of the MPF, and who identified no issues with his conduct of the Audit.

1. In support of these grounds, Mr Williams submits that the Board was not entitled to rely on its own specialist expertise, and that the expert evidence of Mr Rea on which ASIC relied before the Board was insufficient.

1. The bar to establishing legal unreasonableness is high. I recently summarised the relevant principles in Ramsay Health Care Australia Ltd v President, Australian Human Rights Commission [2025] FCA 2 at [74]- [77] as follows:
   1. First, legal reasonableness or an absence of legal unreasonableness is an essential element of lawfulness in decision-making: Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 at [26], [29] (French CJ), [63] (Hayne, Kiefel and Bell JJ) and [88] (Gageler J); Minister for Immigration and Border Protection v Eden [2016] FCAFC 28; (2016) 240 FCR 158 at [58] (the Court). However, in determining whether an administrative decision is vitiated by legal unreasonableness, it is essential first to bear in mind that the Court's jurisdiction is strictly supervisory_: Li_ at [66] (Hayne, Kiefel and Bell JJ). As the Full Court of the Federal Court emphasised in Eden at [59], determining whether a decision is vitiated by legal unreasonableness:

does not involve the Court reviewing the merits of the decision under the guise of an evaluation of the decision's reasonableness, or the Court substituting its own view as to how the decision should be exercised for that of the decision-maker: Li at [66] (Hayne, Kiefel and Bell JJ); Stretton at [12] (Allsop CJ) and [58] (Griffiths J); see also Plaintiff M64/2015 v Minister for Immigration and Border Protection [2015] HCA 50; (2015) 90 ALJR 197 at [23]. Nor does it involve the Court remaking the decision according to its own view of reasonableness: Stretton at [8] (Allsop CJ).

1. Secondly, where the contention, as appears to be the case here, is that an administrative decision is illogical or irrational, Crennan and Bell JJ explained in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 at [133] that "the correct approach is to ask whether it was open to the Tribunal to engage in the process of reasoning in which it did engage and to make the findings it did make on the material before it".

2. Thirdly, it follows that the threshold for finding that the end result or fact finding leading to the end result is illogical or irrational is high. The question is whether no rational or logical decision-maker could arrive at the relevant decision on the evidence before the decision-maker: SZMDS at [130] (Crennan and Bell JJ). It follows that disagreement, indeed even emphatic disagreement, with the decision-maker's reasoning is not sufficient to make out illogicality: CQG15 v Minister for Immigration and Border Protection [2016] FCAFC 146; (2016) 253 FCR 496 at [61] (the Court). As the Full Court explained in DCP16 v Minister for Immigration and Border Protection [2019] FCAFC 91 at [85]-[86]:

differences of degree, impression and empirical judgment between the approach and reasoning of the Authority as compared with the opinion of a court undertaking judicial review do not establish illogicality or irrationality (Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 at [78] per Heydon J). There is a high threshold. The question is whether no rational or logical decision-maker could arrive at the relevant decision on the evidence before the decision-maker (SZMDS at [130] per Crennan and Bell JJ). ...

1. Fourthly, an evaluation of whether an administrative decision is legally unreasonable and therefore outside the range of possible lawful possible outcomes must be made having regard to the terms, scope and policy of the statutory source of the power: see Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11; (2016) 237 FCR 1 (Stretton) at [9] (Allsop CJ, with whose reasons Wigney J agreed at [90]). Thus, as the Full Court explained in Eden at [63], "in order to identify or define the width and boundaries of this area of decisional freedom and the bounds of legal reasonableness, it is necessary to construe the relevant statute": see also Li at [24] (French CJ), [67] (Hayne, Kiefel and Bell JJ).

1. Finally, in determining whether an administrative decision is vitiated by legal unreasonableness, it is essential first to bear in mind that the Court's jurisdiction is strictly supervisory_: Minister for Immigration and Citizenship v Li_ [2013] HCA 18; (2013) 249 CLR 332 at [66] (Hayne, Kiefel and Bell JJ). As the Full Court of the Federal Court emphasised in Minister for Immigration and Border Protection v Eden [2016] FCAFC 28; (2016) 240 FCR 158 at [59], determining whether a decision is vitiated by legal unreasonableness:
   1. ... does not involve the Court reviewing the merits of the decision under the guise of an evaluation of the decision's reasonableness, or the Court substituting its own view as to how the decision should be exercised for that of the decision-maker: Li at 363 [66] (Hayne, Kiefel and Bell JJ); Stretton at [12] (Allsop CJ) and [58] (Griffiths J); see also Plaintiff M64/2015 v Minister for Immigration and Border Protection [2015] HCA 50; (2015) 90 ALJR 197 at 203 [23]. Nor does it involve the Court remaking the decision according to its own view of reasonableness: Stretton at [8] (Allsop CJ).

4.3.3 Is the Board entitled to rely on its own expertise (legal unreasonableness issues 1 and 2)?

1. While Mr Williams accepts that a specialist tribunal may be capable of relying on its own expertise, he submits that this is precluded in the case of the Board because, among other things, the Board is not constituted by a majority of experts under the statutory scheme. As such, Mr Williams submits that "evidence from a suitably qualified and experienced registered company auditor was required before any findings could be made by the Board that Mr Williams had breached his professional duties as an auditor".
2. However, that submission must be rejected. In my view, the Board is properly regarded as an expert or specialised board and is therefore entitled to rely upon its expertise and specialised knowledge subject to the obligation to act in accordance with procedural fairness.
3. First, in addition to a Chair and Deputy Chair with the requisite legal qualifications and experience, s 203 of the ASIC Act provides that the Board consists of:

(1) six accounting members who must be a member of a professional accounting body or other prescribed body; and

(2) six business members, being persons who the Minister is satisfied are suitable for appointment as a representative of the business community because of the person's qualifications in, knowledge of, or experience in relevant specified fields.

1. Furthermore, in the case of applications relevantly by ASIC for a person to be dealt with under s 1292 of the Corporations Act, s 210A(4) of the ASIC Act requires the Board to be constituted so that, in every case, there will be either one or two accounting and business members, together with the Chair or Deputy Chair, on the panel. Furthermore, under s 210A(3) of the ASIC Act, the Chair may determine that the panel constituted in a particular manner is to hear matters of a particular kind or matters which satisfy particular criteria. The purpose of these provisions can only, with respect, be to permit the Board as constituted in particular cases to draw upon the knowledge and experience of its members in determining disciplinary proceedings, subject to the requirements of natural justice with which the Board is required to comply. This construction is reinforced by the fact that the Board is not bound by the rules of evidence (s 218(1)(b) of the ASIC Act), that its proceedings are to be conducted with little formality and technicality (s 218(1)(a)), and, as I shortly explain, that there is no onus of proof in disciplinary proceedings before the Board.
2. As such, contrary to Mr Williams' submissions, in my view, the statutory scheme is closely analogous to that considered in Kalil v Bray [1977] 1 NSWLR 256. In common with the statutory scheme here, under the Veterinary Surgeons Act 1923 (NSW), the disciplinary tribunal considered in Kalil always included three to five qualified veterinary surgeons as well as a District Court judge as Chair. Given that statutory context, Street CJ (with whose reasons Moffitt P and Glass JA relevantly agreed) described the disciplinary tribunal as "in every sense ... an expert professional tribunal" (at 258) which, as described at 261, was:

... entitled to draw upon its own expert resources from within its membership in identifying the evidence relevant to the forming of [a medical] opinion ... and in the further step of actually forming such opinion.

It would be unreal to expect the members of the tribunal, being professionally qualified veterinary surgeons and occupying seats on the tribunal by virtue of that very qualification, to fail to use their expert knowledge in resolving any matter of veterinary science arising in proceedings before the tribunal. The tribunal is in truth an expert panel, and as such it needs no expert evidence on matters within its particular field of expertise, that is to say, the field of veterinary science. Its function is to determine in the light of factual evidence, with or without supplementation by expert evidence, the proper veterinary conclusion to be drawn from such objective facts as may be established by the evidence, bearing in mind at all times that its function is essentially, as its name imports, disciplinary.

1. Similarly, in Jager v Medical Complaints Tribunal [2004] TASSC 58; (2004) 12 Tas R 446 at [25], Blow J (as his Honour then was) held that:
   1. In my view [the Medical Practitioners Registration Act 1996 (Tas)] Sch3, cl 3(b) and (c), whereby the Tribunal is not bound by the rules of evidence and may inform itself on any matter in any way it considers appropriate, entitles it to inform itself by reference to matters of expert knowledge known to its members and not mentioned in evidence. ... Provided it observes the rules of natural justice, I think it is appropriate for the Tribunal to make full use of the expertise of its medically qualified members in evaluating the evidence before it and in drawing inferences from that evidence. I see no reason why a different approach should be taken in relation to the drawing of an inference that particular conduct would incur the strong reprobation of medical practitioners of good repute and competence. I therefore think it was open to the Tribunal, in the absence of direct expert evidence as to that ultimate question, to draw inferences from the evidence it received, or to make use of the expert knowledge of its members, or both.
2. Secondly, Mr Williams seeks to distinguish Jager on the ground that the statutory schemes there expressly permitted the tribunal in question to inform itself on any matter in any way it considered appropriate. The absence of a similar provision in the statutory scheme here means, in Mr Williams submission, that the Board is precluded from informing itself by reference to the specialised knowledge and experience of its members. In support of that submission, Mr Williams also relies upon other aspects of the statutory scheme including the fact that there will always be a minority of accounting members on a panel under the statutory scheme, the openness of the Auditing Standards, the requirement for a hearing, and the possibility of merits review.
3. However, Mr Williams does not explain why these aspects of the statutory scheme support his construction. Furthermore, Mr Williams' submissions ignore the fact that those considered by Parliament to have relevant specialised knowledge and experience, being the accounting and business members, will always constitute the majority on any panel.
4. In my view, the fact that there is nothing in the statutory language of sub-s 1292(1)(d) of the Corporations Act (or elsewhere in the statutory scheme) which prohibits the Board from using specialised knowledge, subject to compliance with natural justice, is more significant than the absence of an express provision to use it. Similarly, in Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v Viane (2021) 274 CLR 398; [2021] HCA 41, the High Court held that a decision-maker, being in that case the Minister, was able to take into account specialised knowledge in determining whether there was "another reason" to revoke the mandatory cancellation of a person's visa under s 501CA(4) of the Migration Act 1958 (Cth). Specifically, in a unanimous judgment, the Court held at [17]-[18] and [20] that:
   1. If the Minister exercises the power conferred by s 501CA(4) and in giving reasons makes a finding of fact, the Minister must do so based on some evidence or other supporting material, rather than no evidence or no material, unless the finding is made in accordance with the Minister's personal or specialised knowledge or by reference to that which is commonly known. By "no evidence" this has traditionally meant "not a skerrick of evidence".
   2. There is otherwise nothing in the statutory language of s 501CA(4) of the Act that prohibits the Minister from using personal or specialised knowledge, or commonly accepted knowledge, for the purpose of considering the representations made by an applicant, and in determining whether the Minister is satisfied that there is "another reason" for revocation. Indeed, there are simply no limitations on the sources of information that may be considered by the Minister in determining whether to reach the state of satisfaction prescribed by s 501CA(4)(b)(ii). Nor is there any express requirement that the Minister disclose whether a material finding was made from personal knowledge. In the circumstances of the present case, where no evidence or other material has been identified in support of the Minister's findings about the speaking of English and the availability of services in American Samoa and Samoa, it can be assumed that the findings proceeded from the Minister's personal or specialised knowledge or were matters commonly known.

...

1. There is no necessary dividing line, for the purposes of s 501CA of the Act, between the use of personal or specialised knowledge, or the use of that which is commonly known, as against the need for some evidence or other material to support a finding which the Minister may make. Where the Minister wishes to make a finding in support of a conclusion that she or he is not satisfied that there is "another reason" for revocation, and the Minister has personal or specialised knowledge which supports that finding, the Minister may use that knowledge. The Minister may also supplement or support such a finding with evidence or other material. Where the finding is not within such personal or specialised knowledge, and is not a matter commonly known, it will need to be supported by some evidence or other material. It cannot be asserted without any basis at all. ...

1. Thirdly, Branson J in Goodman held at [26] that "[t]he task of determining the relevant accepted professional standards" for the purposes of determining whether an auditor had adequately and properly performed the duties of an auditor "[was] a task within the expertise" of the then Companies Auditors and Liquidators Disciplinary Board. Similarly, in Dean-Willcocks at [36], Tamberlin J held that:
   1. The authorities referred to are not of assistance to the applicant because they do not address the terms of the statutory provisions concerning the cancellation of registration or suspension of liquidators under the regime established by ss 1290-1298. These provisions are specifically designed to set up a regime for cancellation and suspension where there has not been proper or adequate performance of duties as determined by a representative specialist Board, which is set up to take into account the conduct standards formulated by relevant professional bodies. Section 1292 is concerned with the manner and sufficiency of the liquidator's performance of the office of administration. Both the constitution of the Board and the formulation of the standards provide a benchmark and specialist framework of reference for consideration of questions of adequacy and sufficiency of performance.

1. Mr Williams' attempt to distinguish Goodman and Dean-Willcocks on the basis that they were not centrally concerned with the alleged requirement for expert evidence does not assist in drawing a positive inference in favour of his construction that expert evidence must be adduced.
2. Fourthly, Mr Williams sought to draw an analogy with authorities requiring the tender of expert evidence in order to prove a breach of a duty of care in the context of tortious actions in professional negligence: see, eg, Atlantis Properties Pty Ltd v Cameron [2005] QCA 297; Caribbean Steel Co Ltd v Price Waterhouse (a firm) [2013] UKPC 18; [2013] 4 All ER 338; Investors in Industry Commercial Properties Ltd v South Bedfordshire District Council [1986] QB 1034; Strover v Harrington [1988] Ch 390; and Sansom v Metcalfe Hambleton & Co [1998] 2 EGLR 103. However, this line of authority has no relevance in the context of construing statutory powers vested in the Board in disciplinary proceedings and is clearly distinguishable. Thus, in Swain v Waverley Municipal Council [2005] HCA 4; (2005) 220 CLR 517 at [40], McHugh J held that, in an action in professional negligence, the onus lies upon the plaintiff to establish on the balance of probabilities "a reasonably practicable precaution or alternative course of conduct that could have avoided, or reduced the consequences of, the injury to the plaintiff". Discharging that onus, in turn, will generally require expert evidence. As his Honour further elaborated at [45] (in a passage on which Mr Williams relies):
   1. Where the case involves a technical or complex operation or service, however, it is likely that the plaintiff will not have a case to go to the jury without leading technical or expert evidence as to the existence and practicability of the suggested alternative. Where the issues involve "technical knowledge and experience", the plaintiff must provide evidence as to what the defendant ought to have done. The question cannot be determined by the application of common knowledge, and a jury cannot decide the issue on the basis of its own ideas as to what the defendant ought to have done. Thus, a mere allegation that a precaution is practicable is insufficient where the evaluation of whether or not the precaution is practicable involves issues of technical knowledge and experience.
3. By contrast, there is no onus of proof to be discharged under sub-s 1292(1)(d)(i) of the Corporations Act and no criterion under that provision analogous to the requirement in a negligence claim to establish a suggested alternative course of conduct which could have mitigated a risk of injury_._ Nor is the Board bound by the rules of evidence, and its function under sub-s 1292(1)(d)(i) is to reach a subjective state of satisfaction as to whether a person has failed adequately and properly to carry out or perform the duties of an auditor. As O'Bryan J explained in BOY19 v Minister for Immigration and Border Protection [2019] FCA 574; (2019) 165 ALD 39 at [54] with respect to a law requiring an administrative decision-maker to reach a state of satisfaction (being in that case, as to whether a person was of good character):
   1. Section 21(2)(h) [of the Migration Act 1958 (Cth)] requires the Minister to form a judgment as to whether he or she is satisfied that the applicant for citizenship is of good character. The word "satisfied" in that context is not amenable to the application of an evidentiary burden of proof, such as balance of probabilities. That is for at least two reasons. First, the decision is an administrative decision to which the rules of evidence are inapplicable and the evidentiary burden of proof inapposite: ... Second, the matter of which the Minister must be satisfied, the applicant's good character, is not a fact to be proved but an opinion requiring an evaluative judgment. A standard of proof, such as balance of probabilities, is incapable of application to such an opinion. In an analogous context (whether the Minister was satisfied that a person was a refugee), the plurality in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 (Brennan CJ, Toohey, McHugh and Gummow JJ) stated (at 282):

Where facts are in dispute in civil litigation conducted under common law procedures, the court has to decide where, on the balance of probabilities, the truth lies as between the evidence the parties to the litigation have thought it in their respective interests to adduce at the trial. Administrative decision-making is of a different nature. A whole range of possible approaches to decision-making in the particular circumstances of the case may [be] correct in the sense that be [sic] their adoption by a delegate would not be an error of law. The term "balance of probabilities" played a major part in those submissions, presumably as a result of the Full Court's decision. As with the term "evidence" as used to describe the material before the delegates, it seems to be borrowed from the universe of discourse which has civil litigation as its subject. The present context of administrative decision-making is very different and the use of such terms provides little assistance.

1. As O'Bryan J continued (at [55]), this is subject to the standard of legal reasonableness, but the requirement of legal reasonableness "is not a vehicle for challenging a decision on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgment with which the Court disagrees". In other words, as Brennan J held in Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1 at 35:

The question can be put quite starkly: when an administrative power is conferred by the legislature on the executive and its lawful exercise is apt to disappoint the expectations of an individual, what is the jurisdiction of the courts to protect that individual's legitimate expectations against adverse exercises of the power? I have no doubt that the answer is: none. Judicial review provides no remedies to protect interests, falling short of enforceable rights, which are apt to be affected by the lawful exercise of executive or administrative power. If it were otherwise, the courts would be asserting a jurisdiction, in protection of individual interests, to override the law by which a power to affect those interests is conferred on the repository.

1. Finally, Mr Williams relies by analogy upon authorities in the context of medical and veterinary tribunals in support of the proposition that the Board was not able to rely on its specialised knowledge and experience. However, the decisions on which Mr Williams relies turned upon their particular facts. Thus, in Dekker v Medical Board of Australia [2014] WASCA 216, on which Mr Williams relied, the Western Australian Court of Appeal held that the two non-medical members of the tribunal could not simply accept the conclusory opinion of the two medical members as to the improper nature of the appellant's conduct at an accident scene in the absence of any evidence in the "unusual circumstances" of that case: at [88], [90]. Those circumstances included "the lack of any existing doctor/patient relationship" and the absence of any specific professional duty or standard (at [88] and [90]). The issue identified by the Court in Dekker was with the lack of experience of the non-medical members upon which to make a finding of fact "in the particular circumstances of th[at] case" (at [89]).
2. Similarly, in Pillai v Messiter [No 2] (1989) 16 NSWLR 197, Samuels JA (with whose reasons Clarke JA agreed) found that the evidence of the expert witness before the medical tribunal fell short of supporting the finding by the tribunal of professional misconduct: at 210. It was in that context that Samuels JA held that "there was no evidence before the Tribunal capable of supporting a finding of misconduct in a professional respect" and observed (in obiter) that the tribunal "was not entitled to substitute its own view of the response which the appellant's professional colleagues would have made to his conduct.": at 210. However, his Honour found that the tribunal did not endeavour to substitute its own view, but instead wrongly approached the issue as if it were an action for professional negligence. It follows with respect that Mr Williams' attempt to draw generalised conclusions from these decisions in support of his narrow construction of the Board's powers in a disciplinary proceeding must be rejected.
3. Finally, to the extent that Mr Williams puts the ground as an issue of no evidence, that submission also cannot be sustained. This is because the ground is based on the existence of a requirement for the Board to rely upon a specific kind of expert evidence before it could make any findings that Mr Williams had breached his professional duties as an auditor. Yet no such requirement for the Board has been established. Furthermore, as I find with respect to issue 3 below, there was expert evidence before the Board on which it was entitled to rely even if that evidence was not evidence from an expert with the precise qualifications and experience which Mr Williams says was necessary.

4.3.4 Mr Rea's evidence (legal unreasonableness issue 3)

1. Mr Williams also challenges the findings by the Board with respect to the evidence of Mr Rea, who was called by ASIC, to contend that the Cancellation Decision lacks an evident and intelligible justification.
2. The Board considered Mr Rea's evidence at [159]-[162] of the Cancellation Reasons in relation to Mr Rea's review of the files produced by WPIAS as follows:
   1. In support of the SOFAC allegations, ASIC tendered statements from Mr Rea that were admitted into evidence. To the extent ASIC's case relied upon an absence of documentation on the WPIAS Audit Engagement File, Mr Rea's evidence was that the allegations were based on his review of the files produced by WPIAS pursuant to the Section 30A Notices from ASIC requiring production of the audit files of WPIAS with respect to the 2011 and 2012 LM Audits. Mr Rea was cross-examined by Mr Williams on his statements at some length during the proceedings. Mr Rea is a Chartered Accountant. He worked in the audit division of Price Waterhouse Coopers for six years, and has been an officer of ASIC since 2005, where his duties have included reviewing audits conducted by registered company auditors to ensure compliance with the Auditing Standards and the Act.
   2. Mr Rea was responsible for the conduct of the investigation into the 2012 LM Audit and for drafting the SOFAC with respect to this Application.
   3. In our view, Mr Rea was appropriately qualified and experienced to conduct a review of WPIAS' 2011 and 2012 LM Audit Engagement Files to assess compliance with the Auditing Standards and the Act.
   4. We accept Mr Rea's evidence with regard to the manner in which he conducted the review of those files.
3. However, Mr Williams submits that, despite Mr Rea's qualifications being centrally relevant to the cogency of ASIC's complaint, Mr Rea was not appropriately qualified. This said to be due to Mr Rea's admitted lack of experience in conducting an audit as an engagement, lead or engagement quality review partner, his allegedly limited experience working on audits at PwC, and the fact that his experience with ASIC was from "a review perspective". Mr Williams therefore contends that the Chair of the Board erred in disallowing a line of questioning in cross-examination about Mr Rea's qualifications on the basis that it "is perhaps designed to suggest that he is not properly qualified to have reviewed your audit file".
4. These matters fall well short of establishing that the Board's findings that Mr Rea was "appropriately qualified and experienced to conduct a review" lacked an intelligible justification. The Board set out the basis on which it accepted that Mr Rea was appropriately qualified and experienced. It was plainly open to the Board to reason in this way. Mr Williams' argument impermissibly seeks to challenge the weight that the Board gave to Mr Rea's evidence and thereby to challenge the merits of the Board's decision: Dean-Willcocks at [38] (Tamberlin J); Peko-Wallsend at 41 (Mason J). This allegation is, with respect, without merit.

4.3.5 Evidence in relation to quality control framework (legal unreasonableness issue 4)

1. Finally, Mr Williams contends that it was legally unreasonable for the Board to find that he had failed to carry out or perform adequately and properly the duties of an auditor given that there was evidence before the Board of the Quality Control Review that was conducted in August 2013. The Quality Control Review found that there were no deficiencies in the quality control framework at the firm and nothing to suggest non-compliance with the relevant standards. In support of his Legal Unreasonableness Ground, Mr Williams also relies upon the absence of any reference in the Cancellation Reasons to the assurance audit of Mr Williams' self-managed super fund audit files conducted by the Australian Tax Office (the ATO Review). The ATO Review found that:

We are satisfied that you have the controls, processes and procedures in place that are appropriate and effective to ensure you meet your obligations and undertake quality audits.

1. The Quality Control Review and ATO Review were, therefore, in Mr Wiliams' submission "centrally relevant, particularly in circumstances where Mr Williams did not himself personally carry out most of the work on the Audit". Accordingly, he contends that the evidence was wrongly excluded.
2. For reasons I shortly explain, given the Board's obligation to set out its findings on material facts, it can reasonably be inferred that the Board did not refer to these documents in the Cancellation Reasons because it did not regard them as material.
3. First, as Mr Williams acknowledged, the scope of the ATO Review did not include the Audit.
4. Secondly, the Quality Control Review was a short report which considered only the processes followed by Mr Williams' firm. With respect to the scope of their report, the reviewer also explained that they undertook only a review of the quality control system while "[t]he member is responsible for the development, maintenance and implementation of the system of quality control". Furthermore, the reviewer explained that:

My review was limited to a review of the member's system of quality control based on information provided by the member and a review of the application of the member's quality control procedures in a selected sample of engagement fields. My procedures included examination on a test basis of evidence supporting the member's assertions as to compliance with professional standards and regulatory and legal requirements.

1. As such, the Quality Control Review was not an evaluation of Mr Williams' conduct with respect to the Audit. It was a systems' review that was based on information provided by the firm and that considered the application of those systems to a selected sample. It was for this reason that the Board determined that the evidence with respect to the Quality Control Review was not relevant to the question of whether Mr Williams had failed to carry out or perform adequately and properly the duties of an auditor. Thus, in response to Mr Williams' submission that the quality control system employed at the time of the Audit was relevant, the Chairperson stated in the course of the Board Proceedings that:

[T]here isn't any allegation that there was any deficiency in that quality control framework at the firm and although that evidence again is evidence that we will be happy to consider, in terms of a sanction hearing, if we get to that point, that it's not a matter that we consider relevant to the substantive issues in the proceedings.

...

Although the frameworks in place at the firm are important and in terms of considering what an appropriate sanction might be, if we have made findings under section 1292, then the context in which the matters that were the subject of the allegations, the context in which they occurred and whether there are any factors that would lead us to believe that, you know, that they were sort of one-off events, for example, or that they happened in extenuating circumstances, they're the things that impact our view about ultimately what the appropriate sanction is.

1. It can be properly inferred from this, together with the Board's obligation to set out only its findings on material questions of fact and the evidence on which they are based (as explained at [93] below), that the Board did in fact consider evidence of the firm's quality control framework but ultimately decided that the evidence was not relevant to a material fact. It was clearly open to the Board to reach that view and any challenge to that view impermissibly seeks to agitate the merits of the Board's Cancellation Decision.
2. Thirdly and in any event, the fact that Mr Williams strongly disagrees with the Board's finding that it was satisfied he had failed to carry out or perform adequately and properly the duties of an auditor and, as an aspect of that, as to the relevance of the Quality Control Review and the ATO Review, falls far short of establishing that no rational or logical decision maker could have arrived at the same conclusion: Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 at [130] (Crennan and Bell JJ). The allegation of legal unreasonableness on this ground is, with respect, untenable and rises no higher than an impermissible challenge to the merits of the Board's decision.

5. THE CHALLENGE TO THE BOARD'S DECISION TO CANCEL MR WILLIAMS' REGISTRATION RATHER THAN IMPOSE A SUSPENSION

1. Grounds 4(a), (b), (c) and (d) allege that in deciding to cancel Mr Williams' registration, rather than suspending him for a limited period or dealing with him under s 1292(9) of the Corporations Act, the Board took into account an irrelevant consideration and failed to take into account relevant and material considerations. It is therefore useful first to explain the principles which help determine whether a consideration is a relevant consideration in a jurisdictional sense and secondly the principles by which a Court considers what inferences may be drawn from the failure by a tribunal to refer to or make findings on particular evidence or submissions.
2. First, it is well established that the failure to have regard to a relevant consideration or the taking into account of an irrelevant consideration which affects the exercise of power by the administrative decision-maker is an error of law and gives rise to jurisdictional error: see, eg, Peko-Wallsend at 39-40 (Mason J); Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323 at [82]-[84] (McHugh, Gummow and Hayne JJ). Whether or not a consideration is a relevant or irrelevant consideration in this sense turns upon the proper construction of the provision vesting the statutory power or discretion. Thus, as Kiefel and Bennett JJ, for example, explained in Minister for Immigration and Multicultural and Indigenous Affairs v Huynh [2004] FCAFC 256; (2004) 139 FCR 505 at [71]:
   1. A relevant consideration in an administrative law sense has a limited meaning. It is one which the decision-maker is bound to take into account in making the decision in question. The factors which the decision-maker is bound to take into account are determined by the construction of the statute conferring the discretion. If they are not stated, they are to be determined by implication from the subject-matter, scope and purpose of the Act ...
   2. Furthermore and related to this, it is necessary "to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. ... In determining the question of purpose, regard must be had to 'the language of the relevant provision and the scope and object of the whole statute'": Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [93] (McHugh, Gummow, Kirby and Hayne JJ) (quoting Tasker v Fullwood [1978] 1 NSWLR 20 at 24 (Hope, Glass and Samuels JJA)).
3. Secondly, the question of what inferences should be drawn from any alleged omissions in the Board's written reasons falls to be considered having regard to the statutory context in which they were produced. Where, as here, the Board decides to exercise the powers vested in it under s 1292 of the Corporations Act, s 1296(1) requires the Board, within 14 days after a decision is made, to give the person written notice setting out the decision "and the reasons for it". In turn, s 25D of the Acts Interpretation Act specifies the content of statements of reasons, requiring that "the instrument giving the reasons shall also set out the findings on material questions of fact and refer to the evidence or other material on which those findings were based". In Comcare v Kemp [2020] FCA 865, I summarised the authorities regarding the drawing of inferences in the context of the obligation to provide reasons under s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth), being a provision which is not materially different from s 25D of the Acts Interpretation Act. Specifically, at [50]-[53] of Kemp, I explained that:
   1. ... Gleeson CJ explained in Yusuf with respect to the preparation of written reasons under s 430 of the Migration Act 1958 (Cth) (which is relevantly the same as s 43(2B) of the AAT Act) that:
      1. When the Tribunal prepares a written statement of its reasons for decision in a given case, that statement will have been prepared by the Tribunal, and will be understood by a reader, including a judge reviewing the Tribunal's decision, in the light of the statutory requirements contained in s 430. The Tribunal is required, in setting out its reasons for decision, to set out "the findings on any material questions of fact". If it does not set out a finding on some question of fact, that will indicate that it made no finding on that matter, and that in turn, indicate that the Tribunal did not consider the matter to be material.

(emphasis added; see also Yusuf at [69] (McHugh, Gummow and Hayne JJ))

1. Conversely Gleeson CJ held at [10] that "[b]y setting out its findings, and thereby exposing its views on materiality, the Tribunal may disclose a failure to exercise jurisdiction, or error of a kind falling within a ground in s 476(1) other than s 476(1)(a), or may provide some other ground for judicial review." It follows that the mere failure to make a finding on a particular issue does not necessarily mean that the Tribunal overlooked the issue or misunderstood the nature of the task which it was required to undertake.
2. Secondly, the inference that the Tribunal has not mentioned a matter because it did not regard it as material may be displaced by other considerations. As Perram J explained in SZTMD v Minister for Immigration and Border Protection [2015] FCA 150; (2015) 150 ALD 34 (in a passage approved by the Full Court in Minister for Home Affairs v HSKJ [2018] FCAFC 217; 266 FCR 591 at [44]):
   1. The inference in Yusuf is not mandatory. The manner in which a statement of reasons is drawn, or even its surrounding context, may provide material which detracts from, or even displaces, the inference. For example, there may be country information which was available to the Tribunal which is so obviously relevant that it is unthinkable that the Tribunal would not have referred to it if it had actually considered it. There is nothing, however, like that in this case. The applicant's argument did not move beyond the generality of the claim that the material was not considered to any detailed analysis of what that might signify. In those circumstances, there is no good reason not to draw the Yusuf inference. Once that occurs it seems to me that I cannot avoid the conclusion that the Tribunal did address itself to the issue of the relevance of the material and decided that it was irrelevant.
3. Thirdly, reasons must be read understanding that they record the decision-maker's subjective reasoning processes and therefore what the decision-maker considered to be material i.e. relevant. As the five member Full Court held in Minister for Home Affairs v Ogawa [2019] FCAFC 98; 369 ALR 553 by analogy:
   1. ... the making of a decision involves a mental process, while the reasons provide evidence of the mental process engaged in by the decision-maker... It is not necessary for reasons to refer to every piece of evidence advanced, as, for example, some evidence may be irrelevant, or its consideration may be subsumed into findings of greater generality... It may also be observed that the Minister's obligation under s 501G(1) is limited to setting out findings on those questions of fact which he or she subjectively considers to be material: cf Yusuf at [68]. However, where the reasons do not expressly refer to an issue, an inference may, but will not necessarily, be drawn that the issue was not adverted to as part of the decision-maker's mental process: Applicant WAEE at [47]. In Minister for Immigration and Border Protection v Sabharwal [2018] FCAFC 160, the Full Court said at [76]:
      1. The written reasons of the Minister may, and generally will, be taken to be a statement of those matters considered and taken into account. If something is not mentioned it may be inferred that [has] not been considered or taken into account. Whether it is appropriate to draw such an inference must be considered by reference to the facts of each particular case and the Minister's reasons as a whole.

5.2 Alleged failure to take into account Mr Williams' Engagement Partner Response (Grounds 4(a) and (b))

1. First, Ground 4(a) alleges that, in deciding to cancel Mr Williams' registration rather than suspending it or dealing with him under s 1292 of the Corporations Act:

[T]he First Respondent took into account an irrelevant consideration, namely, the 'Engagement Partner Response' (as defined in the reasons for the Primary Decision) as evidencing a misunderstanding by the Applicant of the responsibilities of an engagement partner, notwithstanding that:

(i) the Second Respondent had not made any allegation in its Statement of Facts Issues and Contentions that the Applicant, in his capacity as the engagement partner, had breached his duties under ASA 220 with respect to the work of others; and

(ii) the Engagement Partner Response was a reasonable and proper response to the allegations that had been made in the Second Respondent's Statement of Facts Issues and Contentions;

1. As I explained earlier, the "Engagement Partner Response" was a phrase used by the Board to encapsulate Mr Williams' contention that his responsibility as the Engagement Partner for the Audit was limited and did not extend to audit work undertaken by Ms Blank as the alleged "Lead Engagement Partner". Relevantly, the Board found that, despite Mr Williams conceding that the term "Lead Engagement Partner" was never actually used in respect of Ms Blank and abandoning the Engagement Partner Response during the Board Proceedings, Mr Williams' evidence in cross-examination nonetheless continued to reflect a failure to properly understand the scope of his responsibilities as the Engagement Partner under the Auditing Standards. In circumstances where the Cancellation Reasons reveal a correct understanding of the responsibility of an Engagement Partner under the Auditing Standards, it cannot be irrelevant for the Board to take into account Mr Williams' continued failure to appreciate the nature of his responsibilities in deciding whether to cancel his registration as an auditor. The weight given to that misunderstanding was a matter purely for the Board to determine, including in relation to the appropriate sanction. It follows that Ground 4(a) must be dismissed.
2. Secondly, in support of Ground 4(b) alleging that the Board failed to take into account a relevant consideration, being Mr Williams' Engagement Partner Response, Mr Williams contends this consideration (and those referred to in Grounds 4(c) and (d)) are mandatory relevant considerations by reason of s 216(10) of the ASIC Act. That section provides that:

(10) The Panel must take into account:

(a) a submission made to or evidence adduced before the Panel; and

(b) a submission lodged with the Disciplinary Board in relation to the matter to which the hearing relates;

when making any decision on the matter to which the submission or evidence relates.

1. However, the obligation to take submissions and evidence into account is not tantamount to an obligation on the Board to address every submission or piece of evidence in its written statement of reasons, irrespective of whether the Board considers it to be material or relevant to the issues. To the contrary, the obligation on the Board, as earlier explained, is required to set out only its findings on material questions of fact and to refer to the evidence or other material on which those findings were based. It follows that a failure by the Board to expressly address a submission or make a finding about a particular piece of evidence does not, without more, establish that the Board failed to take the submission or evidence into account but rather founds an inference that it did not consider the evidence or submission to be material.
2. Further and in any event, the submission that the Board was required to take the Engagement Partner Response into account in determining the appropriate sanction cannot be sustained in circumstances where Mr Williams himself abandoned the Engagement Partner Response on the ninth day of the Board Proceedings and the Engagement Partner Response was founded on a misapprehension by Mr Williams of his duties as the Engagement Partner. Again, the submission rises no higher than a disagreement by Mr Williams with the Cancellation Reasons and an invitation by this Court to engage in merits review.

5.3 Alleged failure to take into account Mr Williams' experience and reputation (Ground 4(c))

[T]he First Respondent failed to take into account, by giving any weight to, a relevant and material consideration, namely the evidence of the Applicant's professional qualifications, experience and long history and reputation as a registered auditor (as evidenced by paragraphs 6 to 11, 13, 16 to 25, 44 to 48 and 222 of his statement dated 1 February 2018, and the annexures referred to in those paragraphs), which:

1. was directly relevant evidence of the Applicant's knowledge and abilities as an auditor, and was not character evidence;
2. was material and logically and rationally tended to support a conclusion that the Applicant's purported breaches of duty in respect to the Audit were atypical and, with the benefit of the First Respondent's findings, were unlikely to be repeated;

1. This ground must also be dismissed. The Board expressly considered the evidence and submissions on these matters. Thus, despite accepting the character evidence at [1351] of the Cancellation Reasons, the Board found that the evidence did not assist it in forming a view that, following a period of suspension, Mr Williams would be fit to resume practice as a registered auditor. Thus, it found, among other things, at [1351] that:

None of the statement specifically addressed the Board's findings or provided explanation or comfort as to why serious and significant lapses of professional judgement and other failures to perform his duties as an auditor occurred nor why it was logical to conclude they were confined to the 2012 LM Audit or would not otherwise recur.

1. The Board further found at [1352]-[1355] of the Cancellation Reasons that:
   1. Mr Lynch further submitted that the conduct was unlikely to be repeated both on the basis of the character evidence tendered and because the proceedings themselves had served to amend any misunderstanding on Mr Williams' part of his professional obligations.
   2. As to the first aspect of this submission, our view is that the character evidence does not provide a basis for concluding that the conduct is unlikely to be repeated because none of those statements addressed the specific matters the subject of our findings or referred to circumstances at play that explained why the conduct had occurred and why it was unlikely to be repeated. This is particularly relevant given the seriousness and extent of the matters identified in these proceedings that caused us to comment on the pervasiveness of the lack of knowledge and ability evidenced by our findings.
   3. As to the second aspect of this submission, we comment that the way in which this matter was conducted does not support this submission. For example it was submitted at the sanctions hearing that the relative number of hours spent by Mr Williams on the audit compared to the other auditors at his firm who had worked on the matter was relevant to Mr Williams' commensurate responsibility for the failings identified. That submission in our view demonstrates Mr Williams' continuing lack of appreciation and understanding of the important and distinct nature of his role and responsibilities as Engagement Partner in an audit and does not provide us with a basis for confidence that similar conduct would not recur. Similarly our comments in paragraph 1350 on Mr Williams' reliance on the Limited Purpose/Limited User Response as explaining why the audit was performed in the way that it was do not give us confidence that these proceedings have served to amend the lack of knowledge and ability demonstrated by our findings.
   4. We also refer to and repeat our comments in paragraph 1348 which are relevant to the point of whether we could be confident that the conduct would not recur were we to suspend Mr Williams' registration. Those comments address the important matter of what our findings indicate about Mr Williams' capacity for proper professional judgement, a matter that is not easily developed or improved and yet is integral to the proper performance of so many of the duties of a registered auditor. The character evidence does not reveal an explanation as to why Mr Williams' professional judgement was so lacking in so many of the decisions that he made with respect to the 2012 LM Audit.
2. It follows that Ground 4(c) again rises no higher than disagreement with the merits of the Board's decision and cannot succeed. The weight to be given to Mr Williams' professional qualifications, experience and reputation and to the character evidence was a matter entirely for the Board: Peko-Wallsend at 41 (Mason J); Dean-Willcocks at [38] (Tamberlin J).

5.4 Alleged failure to take into account Mr Williams' Limited User/Limited Purpose Response and/or the Subsequent Maddison Audit response (Grounds 4(d) and (e))

1. Grounds 4(d) and (e) of the judicial review application allege a failure to consider what was described by the Board as Mr Williams' Limited User/Limited Purpose Response. Specifically, Mr Williams contends that:

(d) the First Respondent failed to take into account relevant and material considerations, namely the Limited User/Limited Purpose response and/or the Subsequent Maddison Audit response (both as defined in the reasons for the Primary Decision) as exculpatory factors, which, even if they demonstrated a misunderstanding of ASA 700 and/or ASA 320, nevertheless: > > 1. explained why the other conduct the subject of the First Respondent's findings had occurred; and > 2. supported a finding that, with the benefit of the First Respondent's findings, the purported breaches of duty would not be repeated in other circumstances, or in the future; > > (e) the First Respondent's finding that it was improbable that the 2012 LM Audit Opinion was prepared for the Limited Users and only for the Limited Purpose (both as defined in the reasons for the Primary Decision) lacked an evident and intelligible justification, in the face of: > > 1. the evidence that such a belief was documented in contemporaneous workpapers (specifically, the work papers identified as AWPIB1/2, AWPIB1/3 and AWPAD); > 2. the evidence that certain further investigations relating to the Maddison Loan (as defined in the reasons for the Primary Decision) were in fact deferred in that belief until a full audit of Maddison Estate Pty Ltd was conducted; > 3. the fact that it was common ground with the Second Respondent that the Applicant's trustworthiness was not in question;

2. The Limited User/Limited Purpose Response was explained by the Board at [119]-[121] of the Cancellation Reasons as follows:
   1. Mr Williams' second common response to the contentions was that, while LMIM did publish the 2012 LM Audit, it did so in circumstances where that report had been prepared for the limited purpose of assisting LMIM in preparing for the registration of LM as a registered managed investment scheme ("MIS") with ASIC (the "Limited Purpose") and for limited users, being the Board of LMIM and shareholders of LMIM (the "Limited Users").
   2. Mr Williams said further that the 2012 LM Financial Statements would not be made available to third parties until audited financial statements for LM for 2011, 2012 and 2013 were lodged with ASIC, were the Manager to opt to apply for registration of the scheme in Australia after 30 June 2013.
   3. Mr Williams relied on the Limited Users and Limited Purpose, as a basis for asserting that the standard of his performance of the 2012 LM Audit, in the context of those limited users and that limited purpose, was not inappropriate. Mr Williams told the Board that this was a fundamental point and submitted that the approach, scope and methodology taken in an audit is heavily driven by the intended user group, such that the sampling, risk assessment, testing of internal controls and materiality thresholds, may be different. He accepted however that the audit outcome or opinion would not differ as a result.
3. Mr Williams submits that the facts underpinning the Limited User/Limited Purpose Response contextualise Mr Williams' conduct by demonstrating that the Audit was "not ... for consumption by the public, investors and potential investors, but for the internal use only of LM's directors".
4. The Board's rejection of this aspect of Mr Williams' case was based among other things on:

(1) its assessment of the evidence to which it was referred by Mr Williams (at [122] of the Cancellation Reasons);

(2) inconsistencies in Mr Williams' evidence in cross-examination (at [124]);

(3) the terms of the engagement letter (at [125]);

(4) what the Board, drawing on its expertise, considered an experienced auditor would believe (at [126]);

(5) Mr Williams' professional obligations as the auditor of LM (at [128]); and

(6) the fact that, if the Audit was not to be conducted in accordance with the Corporations Act and the Auditing Standards, the engagement letter would have misrepresented the terms of the engagement, as would the 2012 LM Audit Opinion to the extent that it did not refer to or clarify the limited purpose of the Audit and its limited intended audience as alleged by Mr Williams (at [129]).

1. Contrary to Mr Williams' submission, therefore, the Board expressly took into account the Limited User/Limited Purpose Response. Further, there was an ample basis in the evidence for the Board's finding that "it is improbable that the 2012 LM Audit Opinion was prepared for the Limited Users and only for the Limited Purpose": at [131] of the Cancellation Reasons. As such, it was clearly open for the Board to conclude that it did not accept the facts underpinning the Limited User/Limited Purpose Response and its reasons demonstrate that that finding was logical and rational. The suggestion that the Board's rejection of Mr Williams' Limited User/Limited Purpose Response lacked any evident and intelligible justification must therefore be rejected as the suggestion ultimately reduces again to a complaint about the merits of the Board's decision. In any event, the Board concluded in the alternative that "the Limited User/Limited Purpose response does not, in our view, provide a legitimate reason for accepting that there was an appropriate basis for Mr Williams not to have performed the audit to the required professional standard" even if the Audit was prepared for Limited Users for the Limited Purpose: at [132] of the Cancellation Reasons.
2. Equally, Mr Williams' contention that the Board failed to take into account the Subsequent Maddison Audit response must be rejected. The Subsequent Maddison Audit response is defined at [234] of the Cancellation Reasons as the contention that, "[w]ith respect to every Maddison Loan allegation ... WPIAS had reserved the right to alter or reissue the 2012 LM Audit Opinion ... once WPIAS had undertaken a full scope audit of Maddison to be commenced in January 2013 and completed by the end of March 2013".
3. First, the reasons why it was said that the Board had failed to take into account the Subsequent Maddison Audit response was not developed by Mr Williams and, as was the case with respect to the Limited User/Limited Purpose Response, no attempt was made by Mr Williams to explain why, as a matter of statutory construction, the Subsequent Maddison Audit response was a mandatory relevant consideration.
4. Secondly and in any event, the Board sets out the evidence on which Mr Williams relied in support of his contention at [235]-[239] of the Cancellation Reasons, demonstrating that the Board did in fact take the Subsequent Maddison Audit response into account. However, the Board ultimately rejected the Subsequent Maddison Audit response at [242]-[243] on the basis that:
   1. The words of ASA 560 do not contemplate a mechanism for permitting the issue of an unqualified audit opinion on the basis that it could be amended if necessary following the audit of another entity. Rather, it provides a means for dealing with a fact or facts that become known to an auditor following the completion of an audit which fact or facts may have caused the auditor to amend the report, had they been known at the date of the auditor's report. ASA 560 is directed to dealing with unanticipated matters that emerge following the conclusion of an audit, that are relevant to the audit period.
   2. That interpretation of ASA 560 is consistent with and reinforced by paragraph 41 of ASA 700, which unambiguously contemplates that signing an audit opinion represents that an audit is complete.
5. Thirdly, insofar as Mr Williams sought to justify the Subsequent Maddison Audit response on the Limited User/Limited Purpose Response, the Board found at [244] of its Cancellation Reasons that it must fail for the reasons given for rejecting the Limited User/Limited Purpose response.
6. The Board therefore concluded at [249] of the Cancellation Reasons that:
   1. ... we have formed the view that Mr Williams should not have signed an unqualified audit opinion with respect to the 2012 LM Financial Statements as the Subsequent Maddison Audit was not an option that was properly available under the relevant auditing standards to which we have referred to deal with the matters he had identified in Forensic A1 as matters for review/action with respect to the Maddison Loan receivable in the 2012 LM Financial Statements, and about which the evidence shows he did not have sufficient appropriate audit evidence to support the recoverability of that loan and nor, therefore the 2012 LM Audit Opinion in accordance with the requirements of the Auditing Standards ("Finding on the Subsequent Maddison Audit Response").
7. It further recorded its observation at [250] of the Cancellation Reasons as potentially relevant to the question of an appropriate sanction, that:
   1. ... the interpretation of ASA 560 on which Mr Williams' Subsequent Maddison Audit response relied demonstrates, in our view, a quite fundamental misunderstanding on Mr Williams' part, of the scope, purpose and meaning of ASA 560, as well as of the requirements set out in ASA 200.17, ASA 230 and ASA 700. It also demonstrates in our view that the audit was not performed with appropriate professional scepticism as required by ASA 200.15.
8. It follows that Mr Williams' contention that the Board failed to take into account the Subsequent Maddison Audit response cannot be sustained and is, again, ultimately an impermissible attempt to take issue with the merits of the Board's decision.

5.5 Did the Board apply a presumption of cancellation (Ground 4(f))?

1. Mr Williams submits that the Board incorrectly adopted a presumption of cancellation that has no basis in the Corporations Act. The error is said to be evident at [1339] of the Cancellation Reasons where it found (citing Davies v Australian Securities Commission [1995] FCA 674; (1995) 59 FCR 221) that:

(1) a finding that an auditor had failed to adequately and properly carry out their duties in a particular respect "will in the ordinary course mean that a person is not fit and proper to remain registered as an auditor"; and

(2) the question is (therefore) whether "there are relevant matters that provide a basis for exercising the discretion vested in us under section 1292 [of the Corporations Act] to impose a different sanction".

1. In this regard, as Mr Williams submits, in addition to the power to cancel a person's registration when satisfied that the person has failed to carry out or perform adequately and properly the duties of an auditor, the Board has the power to suspend the person's registration under s 1292(1)(d) of the Corporations Act. Section 1292(9) also empowers the Board to impose a lesser sanction by admonishing or reprimanding the person or requiring the person to give an undertaking.
2. It is well established that the reasons for an administrative decision under review "are not to be construed minutely and finely with an eye keenly attuned to the perception of error": Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; (1993) 43 FCR 280 at 287 (Neaves, French and Cooper JJ). Rather, as Brennan CJ, Toohey, McHugh and Gummow JJ observed in Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 272:

[T]he reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision. This has been made clear many times in this Court.

1. Applying this approach, when read fairly and as a whole, the Cancellation Reasons do not, in my view, suggest that the Board applied a presumption that Mr Williams' registration as an auditor should be cancelled but rather carefully weighed what it considered relevant in exercising its discretion.
2. First, the Board did not err in its understanding of its task, as explained in Davies, in finding that a failure to adequately and properly carry out the duties of an auditor will "in the ordinary course" mean that a person is not fit and proper to remain registered as an auditor. Specifically, in holding that the words "or is otherwise not a fit and proper person" in s 1292(1)(d) of the Corporations Act provides a separate basis on which the Board may suspend or cancel a person's registration, Hill J in Davies held at 234 that:

If the words "or is otherwise" have any significance at all it is to express a legislative view that a person who does not carry out or perform adequately and properly the duties or functions referred to in subpars (i) and (ii) will ordinarily not be a fit and proper person to remain registered as an auditor. To the extent that there are cases which do not warrant cancellation or suspension, these may be dealt with either by the general discretion conferred upon the Board in s 1292(1) or the power to impose a lesser disciplinary punishment contained in s 1292(9).

(Emphasis added.)

1. The manner in which the Board explained its task therefore reflected the way in which Hill J had explained that task. I also note, for completeness, that there is no challenge to the correctness of Hill J's statements in Davies.
2. Secondly, Mr Williams' submissions, with respect, take the Board's findings out of context. The Board did not simply identify the question as being whether "there are relevant matters that provide a basis for exercising the discretion vested in us under section 1292 [of the Corporations Act] to impose a different sanction". Rather, it identified the question (at [1339] of the Cancellation Reasons) as:

whether cancellation is a logical consequence or whether there are relevant matters that provide a basis for exercising the discretion vested in us under section 1292 to impose a different sanction such as suspension for a period, that would also be capable of meeting the objectives we have set out above.

(Emphasis added.)

1. Those objectives, in turn, were protection of the public and, as an aspect of that, deterrence. It was these objectives, as the Board explained, that would guide the exercise of the Board's sanction powers, as was stated to be "common ground" between ASIC and Mr Williams. As the Board explained at [1337]-[1338] of the Cancellation Reasons:
   1. In Re Young and Companies Auditors and Liquidators Disciplinary Board the AAT said that the jurisdiction created by section 1292 is of a protective nature and:

'it seems that the protection of the public should be the principal determinant of a proper order but that this may be achieved by an order affecting registration of the person in question. In other words, deterrence is an element of public protection.'

1. Further, in the Board's decision in McVeigh it was said that in exercising its powers under sections 1292(1) or (9) of the Act:

(a) Our prime concern must be protection of the public;

(b) The protection of the public includes the maintenance of a system under which the public can be confident that the relevant practitioner and all other practitioners will know that breaches of duty will be appropriately dealt with;

(c) The personal circumstances of the practitioner are to be given limited consideration.

1. It is evident therefore that, as a matter of law, the Board appreciated that the discretion to determine an appropriate sanction was intended to further the objective of protecting the public and, related to that, deterrence. This also strongly suggests that the Board did not view its task as fettered by a presumption of cancellation but rather to consider what sanction would most appropriately achieve these objectives.
2. Thirdly, the Cancellation Reasons reflect that the Board did not in fact approach the exercise of discretion as if there was a strict presumption of cancellation. To the contrary, in line with its appreciation of the objective to be achieved by imposing a sanction, it undertook a careful consideration of Mr Williams' submissions as to why his registration should not be cancelled and weighed up the various discretionary factors in determining that cancellation was appropriate, including:

(1) the degree to which the Board's findings called into question Mr Williams' fitness as a registered auditor, including the extent of Mr Williams' lack of understanding of what was required by the Auditing Standards ([1343]-[1349] of the Cancellation Reasons);

(2) whether there were ameliorating circumstances that impacted the Board's view on the seriousness and the significance of the conduct the subject of the Board's findings and/or the likelihood of its recurrence in the future, including character evidence and whether the conduct was atypical or likely to be repeated ([1350]-[1355]); and

(3) whether there was a basis on which the Board could be confident that Mr Williams would be fit to resume as a registered auditor following a period of suspension of his registration, including Mr Williams' absence of contrition and approach to the sanctions hearing ([1356]-[1363]).

1. As such, read as a whole, the Cancellation Reasons establish that the Board did consider discretionary factors relevant to its power under s 1292(1)(d) of the Corporations Act, including factors weighing against cancellation.
2. Fourthly, Mr Williams contends that Hill J's statement "made the obvious point that an auditor who generally fails to carry out their duties will not be fit and proper. It does not support the proposition that a single failure, or perhaps a number of particular failures, raises a presumption of cancellation that must be rebutted by the auditor" (emphasis in the original). However, as to the first proposition, there is nothing in the reasons of Hill J in Davies that suggests it is only where an auditor has failed generally or comprehensively to carry out the duties of an auditor that they will not ordinarily be a fit and proper person to remain registered. As to the second proposition, it is premised upon reading the Cancellation Reasons as establishing that the Board adopted a presumption to the effect alleged which is not correct for the reasons I have already given.
3. Finally, to the extent that Mr Williams complains of the Board's decision to cancel his registration by characterising his failures as confined in their scope, Mr Williams is effectively seeking to contest the merits of the Board's reasoning. The Board addressed Mr Williams' submissions that the conduct was an isolated incident. It was entitled to find, as it did, that Mr Williams' conduct demonstrated "serious and significant lapses of professional judgement and other failures to perform his duties" (at [1351] of the Cancellation Reasons), such that there was no basis to conclude that his failures would be confined to the Audit or would not otherwise recur, and to take that finding into account in determining that cancellation was the appropriate sanction.

6. THE CHALLENGE TO THE BOARD'S COSTS DECISION (GROUNDS 5 AND 6)

1. Mr Williams challenges the Costs Decision on two grounds.
2. The first ground, Ground 5, can be dealt with shortly. Mr Williams contends that the Costs Decision is invalid because the Board had not validly exercised its jurisdiction to cancel Mr Williams' registration as an auditor on his earlier grounds of review (i.e. Grounds 3 and 4). The success of Ground 5 is therefore contingent on the success of the earlier grounds dealing with the validity of the Cancellation Decision. As Mr Williams has not established any error of law or jurisdictional error in the Cancellation Decision, Ground 5 must also fail.
3. Mr Williams also contends that, contrary to s 223 of the ASIC Act, the Board not only assessed ASIC's costs of the hearing held in accordance with s 1294 of the Corporations Act but also assessed ASIC's costs in relation to ASIC's application to the Board under s 1292 of the Corporations Act: Ground 6. As a result, in Mr Williams' submission, the Board wrongly decided that Mr Williams was required to pay ASIC's costs inclusive of substantial work preparing the SFIC. Rather, Mr Williams contends that the power as to costs in s 223 of the ASIC Act extends only to the costs of the hearing under s 1294 of the Corporations Act, and not the costs generally of the application under s 1292 as ASIC contends. In Mr Williams' submission, this distinction recognises that ASIC must bring an application under s 1292 to sanction an auditor, but a hearing under s 1294 is required only if the auditor so elects. Mr Williams also submits that this is "a familiar distinction that sometimes arises in legal proceedings, where costs are awarded to a party for particular days in court or for the final hearing, but not for the matter as a whole".
4. Under s 223(4) of the ASIC Act, costs awarded under s 223(1) may be recovered in a court of competent jurisdiction as a debt due to the Commonwealth.
5. In my view, Mr Williams' narrow construction of the power to award costs under s 223(1) of the ASIC Act should be rejected.
6. First, s 223(1) of the ASIC Act provides that, where the Panel holds a hearing in relation to a person in accordance with s 1294(1) of the Corporations Act and cancels or suspends the registration of a person as an auditor, or otherwise deals with the person by admonishing or reprimanding them or requiring them to give an undertaking:

the Panel may require the person to pay an amount specified by the Panel, being all or part of:

(c) the costs of and incidental to the hearing; or

(d) the costs of ASIC or APRA in relation to the hearing; or

(e) the costs mentioned in paragraph (c) and the costs mentioned in paragraph (d).

1. Conversely, s 223(2) of the ASIC Act makes like provision for an order for costs to be made against ASIC or APRA where the Board holds a hearing in relation to a person in accordance with s 1294(1) of the Corporations Act, and refuses to make an order cancelling or suspending the registration of a person as an auditor and does not deal with the person by admonishing or reprimanding them or requiring them to give an undertaking.
2. The apparent purpose of the powers in ss 223(1)(d) and (2)(d) of the ASIC Act is, therefore, to confer a discretion on the Board to award costs to the successful party, ASIC/APRA or the person, in order to compensate them for their costs "in relation to the hearing". As such, ss 223(1)(d) and (2)(d) serve an analogous purpose to that served by an award of costs in litigation. In this regard, it is well established that, absent conduct by the successful party in relation to the conduct of the litigation warranting a different outcome, the ordinary rule in litigation before a Court is that the successful party will receive its costs of the litigation and not merely of the hearing itself: see e.g. Ruddock v Vadarlis (No 2) [2001] FCA 1865; (2001) 115 FCR 229 at [11]- [12] and [15] (Black CJ and French J); Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164 at [25] (the Court). The fact that the Court may, in the exercise of discretion, limit recovery of costs to those of the hearing or in some other way where there is reason to do so, does not lend any support to Mr Williams' narrow construction. Rather, an analogy with the familiar principles of costs in legal proceedings favours the broad construction for which ASIC contends.
3. Secondly, the use of the phrase "in relation to the hearing" in s 223(1)(d) and (2)(d) of the ASIC Act is consistent with an intention to confer a broad discretion on the Board which is not limited simply to the costs "of" the hearing or (as used in s 223(1)(c) and (2)(c)) "of and incidental to the hearing". Thus, for example, given that the purpose of a SFIC is primarily to identify the issues between the parties in advance of the hearing so that they are not taken by surprise at the hearing, such costs plainly in my view fall within the concept of costs "in relation to the hearing".
4. Thirdly, there is no contextual or purposive basis for Mr Williams' narrow construction of s 223(1)(d) of the ASIC Act. In bringing a proceeding which ultimately results in the Board cancelling the registration of a person as an auditor, ASIC incurs costs in relation to the whole of the proceeding from the time of making the application. These, however, are not costs which it would have had to incur but for the person's conduct and failure to concede the breaches.
5. Fourthly, it is not correct to say, as Mr Williams does, that ASIC "must" bring an application, whereas a hearing is only held under s 1294 of the Corporations Act if the auditor so "elects". As ASIC submits, that submission "turns the legislation on its head". This is because s 1294 does not confer a right of election on the auditor. Rather, it imposes a limitation on the Board's powers to sanction a person by requiring that the Board first afford the person an opportunity to appear at a hearing and make submissions and adduce evidence in accordance with the natural justice hearing rule. Furthermore, as ASIC contends, while ASIC must make an application under s 1292(1) of the Corporations Act in order to seize the Board of jurisdiction, ASIC is not under any compulsion to bring an application and should only do so where it considers that the Board is reasonably likely to be satisfied of one of the matters stated in ss 1292(1)(a) to (d). Given that costs are intended to compensate the successful party, there is no reason to decouple the making of an application from the hearing of that application. Mr Williams' attempt to make such a distinction has no grounding in the text, context and purpose of the Corporations Act or the ASIC Act.

1. It follows for these reasons that the application must be dismissed with costs. In these circumstances, it is unnecessary to decide whether, as alleged by ASIC, relief should not be granted in the exercise of discretion.

I certify that the preceding one hundred and thirty-nine (139) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perry.