Wittensleger v Australian Securities and Investments Commission

Federal Court of Australia|2017-02-01|Before: Mr P, McKerracher J

The application for leave to adduce further evidence on the appeal is refused.
The application for extension of time within which to appeal is refused.
The applicant pay the costs of the respondent, to be assessed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE APPEAL 1 Mr Arden Wittensleger seeks an extension of time within which to 'appeal' from a decision of the Administrative Appeal Tribunal by which the Tribunal affirmed certain lifetime banning orders imposed upon Mr Wittensleger on 5 March 2014. Essentially, Mr Wittensleger's complaint is that the Tribunal erred in law in failing to grant an adjournment of the review hearing so as to allow sufficient time for compliance with a witness summons issued by Mr Wittensleger relating to a professional fee funding agreement entered into between Hunter Premium Funding Pty Ltd and Mr Wittensleger. The Tribunal concluded that the documents sought under the summons to produce documents were not relevant to the review hearing. Mr Wittensleger says that the Tribunal erred in law by failing to independently review the Australian Securities and Investments Commission (ASIC) decision to impose lifetime banning orders on him. He contends that the summons directed to Hunter: (a) was regularly issued; (b) was not set aside by the Tribunal; and (c) should have been complied with by Hunter prior to commencement of the review hearing before the Tribunal. 2 Mr Wittensleger also seeks an extension of time within which to bring the application. 3 He also sought leave pursuant to s 44(8)(b) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) to adduce further evidence at the hearing of the application, namely, the documents which would have been produced under the summons.

BACKGROUND 4 Mr Wittensleger was an accountant and director of Nirranda Pty Ltd, trading as James Brae & Broderick, an accountancy practice in Perth. In or about 2007, Mr Wittensleger and Nirranda entered into a professional fee funding agreement with Hunter, under which Hunter provided its services to Mr Wittensleger. Relevantly, Mr Wittensleger would apply to Hunter for fee funding loans predominantly on behalf of the accountancy practice's associated entities. 5 On 23 August 2013, Mr Wittensleger was found guilty of conduct contravening s 409(1) of the Criminal Code (WA), which provides as follows: 409. Fraud (1) Any person who, with intent to defraud, by deceit or any fraudulent means - (a) obtains property from any person; or (b) induces any person to deliver property to another person; or (c) gains a benefit, pecuniary or otherwise, for any person; or (d) causes a detriment, pecuniary or otherwise, to any person; or (e) induces any person to do any act that the person is lawfully entitled to abstain from doing; or (f) induces any person to abstain from doing any act that the person is lawfully entitled to do, is guilty of a crime and is liable - (g) if the person deceived is of or over the age of 60 years, to imprisonment for 10 years; or (h) in any other case, to imprisonment for 7 years. Alternative offence: s. 378, 414 or 417. Summary conviction penalty (subject to subsection (2)): (a) in a case to which paragraph (g) applies: imprisonment for 3 years and a fine of $36 000; or (b) in a case to which paragraph (h) applies: imprisonment for 2 years and a fine of $24 000. 6 Mr Wittensleger says that the basis of the convictions was that: (a) the Court accepted that Hunter had terminated the professional fee funding arrangement with Mr Wittensleger on 18 November 2008; and (b) nonetheless, Mr Wittensleger continued arranging loan applications with an employee of Hunter. 7 He was convicted in the District Court of Western Australia, findings being made by the District Court trial judge, Judge Curthoys (as his Honour then was). On 14 November 2013, he was sentenced on 86 counts of fraud for a total period of 8 years imprisonment. The Court of Criminal Appeal of the Supreme Court of Western Australia unanimously refused leave to appeal and dismissed his appeal against conviction and sentence. Following his sentence, ASIC resolved to make a banning order against Mr Wittensleger, permanently prohibiting him from engaging in any 'credit activities' pursuant to s 80(1) of the National Consumer Credit Protection Act 2009 (Cth) (NCCPA) (credit activity decision). It also made a banning order against Mr Wittensleger, permanently prohibiting him providing any 'financial services' pursuant to s 920A(1) of the Corporations Act 2001 (Cth) (financial services decision). On 16 April 2014, Mr Wittensleger applied to the Tribunal for a review of both the credit activities decision and the financial services decision. He is currently serving his 8 year sentence at Acacia Prison in Western Australia. 8 In essence, the 86 charges of gaining a benefit by fraudulent means arose in consequence of Mr Wittensleger's submission of 86 separate false loan applications in the period from 14 May 2009 to 13 July 2010. Although the conviction was based on Mr Wittensleger's knowledge that Hunter had ceased offering funding arrangements to assist in his cash flow in 2008 by way of a letter dated 18 November 2008 (Termination Letter), Mr Wittensleger challenged at all times the fact that he was aware of such termination. One of the questions arising is whether the convictions secured against Mr Wittensleger necessarily carried with them findings that the Termination Letter was given and that he was aware that it was given. The applications which Mr Wittensleger submitted appeared to be for insurance premium funding when no such insurance policies actually existed. The applications were accompanied by invoices which were found to be without any basis and for amounts he had invented. He fraudulently obtained loans to the value of some $6.6 million from Hunter through pursuing this practice. Later loans were obtained to meet repayments on the earlier loans with a total of about $2.5 million outstanding. 9 In the Tribunal decision under review, (at [11]) the Tribunal relied upon the sentencing remarks of Judge Curthoys where his Honour said: You engaged in a deliberate and sustained fraud as a result of which you received the benefit of some six and a half million dollars. You prepared, signed and submitted 86 fraudulently prepared loan applications to one particular employer, Hunter Premium Funding Ltd, to obtain loans. After the initial fraud, you took out further loans in order to make repayments on the initial loan that you'd taken out earlier from Hunter. You were the director of Nirranda Pty Ltd, the trustee for the Wittensleger Family Trust trading as James Brae & Broderick. Hunter Premium Funding operated throughout Australia and provided short term funding, normally about 12 months for business clients. Up until late 2008, Hunter had two distinct funding products which you'd offered to approved customers. The first of these products was professional fee funding, the second was insurance premium funding, and professional fee funding was a product that was offered to clients, primarily accountants and lawyers and therefore available to you as an accountant. Hunter offered these two products up until late 2008 and you as the operator of James Brae & Broderick, or your company had, from 2007, applied on behalf of some of your clients for fee funding loans from Hunter Premium. You'd entered into professional fee funding arrangement with Hunter Premium and that agreement set out the terms and condition associated with that. Hunter made a commercial decision to withdraw the professional fee funding product from the market as a result of the Global Financial Crisis when that was deemed to be no longer commercially viable. On 18 November 2008, the chief executive wrote to you and gave you 45 days' written notice for cancellation of the professional fee funding arrangement. You received that letter, you received notice of it and knew beyond (?) the letter as well and that is obvious from subsequent correspondence from you to Hunter that you could no longer apply for loans on behalf of your clients to cover professional fees. In your subsequent dealings, you dealt solely with Mr Tony Miliac and in the full knowledge the professional fee funding agreement had been cancelled, you prepared, signed and forwarded directly to Mr Miliac and only to Mr Miliac applications for loans on behalf of purported clients including 86 separate false applications for loans which were the subject of the counts on the indictment and of which you were convicted. There are basically three categories which you engaged in; first of all, those who were your existing clients, such as those associated with Mr Cvetkoski and Partington, those associated with Mr Carter, and several - those associated with yourself. In the case of the first group, primarily those with whom you had some association, the invoices which you attached to the insurance premium funding applications were entirely bogus. There was no basis for them, and they were simply figures invented by you that could never in the circumstances of the fees which you had previously rendered to those clients have reached anything like that. In relation to those to do with Mr Carter, you may have on occasions delivered fees in that level. But it was clear that there was no basis for the invoices that related to these fees. And in the case of your own - those associated with you, such as JBB Tax and Accounting Malaga Pty Ltd, again there was simply no basis for those invoices. When you did supply them, they were completely bogus. You knew at all times that the - there was no basis for the insurance premium, the basis upon which the forms were filled in. You eventually ran afoul of your own deceits. Obviously as time went on the loans the subject of the counts on the indictment were never paid by the borrowers named because they were - although they may have been clients of yours or associated with you, in most cases there was no money coming in from them. So you were taking further loans from Hunter and engaging in the same fraud to repay those. And eventually the scheme fell apart when it was discovered by Hunter. It had run from about 14 May 2009 right up until your conviction on the last count, which was 13 July 2010. And you knew at all times you signed and forwarded the loan applications that Hunter Premium was no longer offering professional fee funding loans. Your entire conduct was completely deceitful. The total amount of fraudulently obtained loans was in the region of about $6.5 million. Some of the later loans were used to repay earlier ones. And the total amount outstanding to Hunter as a result of these particular charges was about - so far as we are able to ascertain, about $2.5 million. (emphasis added) 10 The hearing in the Tribunal commenced on 17 November 2015. Prior to that date, Mr Wittensleger says numerous attempts had been made to obtain certain documents the subject of the summons. The documents were intended to assist in verifying the date when the Termination Letter relied upon by Hunter was created, which Hunter had alleged was received by Mr Wittensleger on or about 18 November 2008. Mr Wittensleger says it is unclear to him which agreement Hunter purported to terminate and whether the agreement fell within the NCCPA insofar as it relates to the allegation that Mr Wittensleger was engaged in a credit activity pursuant to the NCCPA. 11 The evidence of Mr Wittensleger was that only one agreement was entered into between himself, Nirranda and Hunter, which commenced in May 2007 and automatically terminated in or about May 2008 (written agreement). He says, however, there was a separate agreement entered into between him and Hunter after the written agreement had terminated (further agreement). Mr Wittensleger explains that prior to the commencement of the hearing, he was provided with a copy of an email from Ms Deborah Sorrensen, Corporate Solicitor of the Finance Division of Allianz Australia Limited, to the Perth Registry of the Tribunal on 16 November 2016 by which she confirmed that Mr Bradley Bartlem would be available at 10.00 am Perth time, 1.00 pm Sydney time, to give evidence in the matter on the following day. She also attached three PDF copies of an agreement, a deed and a termination letter. 12 On 17 November 2015, at the commencement of the hearing, Mr Wittensleger submitted to the Tribunal that the hearing should be adjourned until a later date to allow further time for Hunter to produce all the documents the subject of the summons. 13 Mr Wittensleger explains that the balance of the documents the subject of the summons, including but not limited to the IT Properties file, would assist in determining when the Termination Letter was created, what agreement it purported to terminate and whether that agreement was one which was intended to fall within the purpose of the NCCPA. 14 Mr Wittensleger complains that it is not clear with respect to the Termination Letter and the agreement which Hunter purported to terminate whether Mr Wittensleger was required to hold a licence with respect to this arrangement. Mr Wittensleger claims that at no time during the term of either agreement did Hunter inform him that he was required to hold a licence. If the document sought to be produced evidenced that no licence was required pursuant to the NCCPA, then it was argued that ASIC may not have the requisite jurisdiction to deal with the matter. Mr Wittensleger has not explained how this might be so, either factually or legally, nor did he do so in the Tribunal. The statement as to possible lack of jurisdiction is no more than a very broad unsubstantiated hypothesis. 15 On 25 July 2016, Ms Sorrensen informed Mr Molony, Mr Wittensleger's solicitor, that relevant documents the subject of the summons had all been deleted in accordance with Allianz's document retention policy and that Mr Wittensleger had been provided with a copy of the Termination Letter by hand. Mr Wittensleger said that at no time did he ever receive a copy of the Termination Letter by hand from Hunter or anyone purporting to act on behalf of Hunter. 16 The evidence of Mr Bartlem in the District Court trial, to which Mr Wittensleger points, was that he could only assume that he, Mr Wittensleger, received the Termination Letter, but could not categorically say that he would have received it. Mr Wittensleger says that he has not been shown a copy of the document retention policy referred to by Ms Sorrensen, nor has he received any evidence relevant to Hunter's documents retention policy insofar as it may refer to the IT Properties file and the alleged deletion of that particular file. 17 Mr Wittensleger says it is not entirely clear what search or searches were undertaken by Hunter and whether those searches were limited to certain hardcopy and PDF files or if the searches included a search of Hunter's electronic operating systems. He says that Ms Sorrensen's email of 25 July 2016 refers to a change in an operating system, but it did not specifically address what instructions were given to Hunters' IT department to recover the IT Properties file. Mr Wittensleger says that in his experience, because a document is deleted from the hard drive of a computer or server, it does not necessarily follow that the operating system has deleted a record of when the file was created. Mr Wittensleger argues that on the basis of that information or belief (that is, his belief) that the relevant information may still be available to Hunter and, therefore, should be produced for the purpose of tendering that as further evidence to be relied upon in the current application.

IN THE TRIBUNAL 18 The Tribunal took the approach that it could not go behind a conviction and examined the facts on which it was based, following earlier decisions of Minister for Immigration & Ethnic Affairs v Gungor (1982) 4 ALD 575; Minister for Immigration and Ethnic Affairs v Daniele (1981) 5 ALD 135; Saffron v Commissioner of Taxation (1991) 30 FCR 578. 19 The Tribunal took the view that in deciding the review application it must accept the facts as found by the District Court judge in his sentencing remarks which have been set out in the Background section to these reasons. 20 The Tribunal cited s 80 of the NCCPA which relevant provides as follows: (1) ASIC may make a banner [sic] order against a person: … (c) for a natural person - if the person is convicted of fraud; or … (f) if ASIC has reason to believe that the person is not a fit and proper person to engage in credit activities; … 21 The Tribunal recorded Mr Wittensleger's main contention as being that although not expressly stated in s 80(1) NCCPA, Parliament's intent was that ASIC's legislative power to make a banning order against a person engaging in credit activities be limited to the persons actively engaged in credit activities or a person who is likely to do so in the future. As Mr Wittensleger was not actively engaged in credit activities at the time of the credit activity decision, he said ASIC had no power to make the credit activity decision, that is, to make a banning order against him under s 80(1) NCCPA. 22 The Tribunal considered that contention to be misconceived as s 80(1)(c) clearly provided that ASIC may make a banning order against a person if the person is a natural person who is 'convicted of fraud'. Undoubtedly this extended to Mr Wittensleger, who had been convicted of 86 counts of 'serious fraud' as defined in s 5 NCCPA. The Tribunal referred to s 6 NCCPA which provides that a person engages in a 'credit activity' when the person provides a 'credit service'. Credit service is defined in s 7 NCCPA as being the provision by a person of 'credit assistance' to a 'consumer' or acting as an 'intermediary'. Section 8 NCCPA defined 'credit assistance' and s 9 defined 'acts as an intermediary'. 23 The balance of the Tribunal's decision focused upon those facts, including further sentencing remarks of the trial judge to the following effect (at [20]): In terms of your personal circumstances, there was a pre-sentence report prepared. You were born on 25 July 1969. You're aged 44. You continue to deny your offending. That notes that you appeared to be driven by status and recognition. The report notes your earlier conviction, and goes on to note the psychological report, that your behaviour appears to be driven by financial gain and status, entitlement, and poor moral development. And the following risk factors were identified. Previous offending for financial gain, relationship instability, possible personality disorder, and possible employment instability. And although not a - and I interpose to comment, although not a psychological assessment and there's no basis for it, in lay terms you appeared to be completely narcissistic, believing that you can do no wrong…… …….you were convicted on 20 September 1996 for 46 counts of stealing for which you received four years' imprisonment on each of the charges which were to be served concurrently. There is a psychological report. That again notes you continue to deny your offending, and you have been and are completely lacking in remorse. You appear to have come from a very stable background, very hardworking parents. The report notes that your parents have a longstanding marriage spanning over 50 years. And you report it's a constructive union, and both your parents are stable individuals. You described your childhood as unremarkable. There were no traumas or victimisation reported. You concluded school at the end of year 12, and commenced a degree in business studies at Curtin University, but transferred to Melbourne for this course. After six months you then returned to Curtin and concluded your studies in the area of business, economics and finance. And it would appear that you have continued to maintain further studies. You built a successful business, at which stage you were - after you were convicted for stealing as an agent, you re-established the business. At one stage you were earning between 3 to 500,000 a year. But plainly that wasn't enough. And there's no doubt that greed is a very motivating factor in your conduct. I've noted the relationship. I notice that you've asserted that the relationship was highly dysfunctional. And I notice that is your reporting of that relationship. There's no evidence of substance abuse. There's no evidence of any major mental health problems, impulsivity or concerns in relation to your interpersonal relationships and support network. You have had every benefit really of academic education, intelligence, ability, a stable family. You've had really all the gifts that this society is capable of bestowing. A good income, but still that's not enough for you. I note that you in the report are critical of - that your lawyer didn't prepare for the complexities of this case. Having viewed Mr Watters' preparation, that assertion by you has no basis for it. The case against you was extremely strong. And your lawyer's alleged lack of preparation has no substance. And again it is typical of your behaviour, such as the comments during the trial when you asserted that it was Hunter who had been deceitful and not you. You have a tendency to blame others. And you continue to deny your responsibility for your behaviour. Perhaps if at some stage in your life you had acknowledged some responsibility for your behaviour, you wouldn't be sitting in the dock now awaiting sentence. The report notes that - further that your drivers appear to be financial gain and status, entitlement, and poor moral development. And it suggests that you put the importance of financial gain over any other considerations, including personal integrity and legal parameters. The risk factors appear to be previous offending for financial gain and status, relationship instability, and a possible personality disorder. And you're now likely to have employment instability due to your offending and the loss of your business. And you've continued to offend, as the report notes, despite previous legal consequences. In terms of the aggravating factors, of course you obtained funds over a long period of time from Hunter Premium. When you were in financial problems, rather than acknowledging them, you continued in that behaviour. Your conduct did involve careful planning and execution. It was sustained behaviour over the period of the charges. It did result in a benefit to you of a large amount of money and a loss. You haven't explained what has become of the money or made any attempt to it and the stolen money, one can only assume, was used to fund an affluent lifestyle. It wasn't offending driven by any mental illness or psychological difficulty and it ended only because Hunter Finance became aware of what was happening as a result of a change in management. Although you weren't charged with causing a detriment, plainly there has been a loss to Hunter Premium, or at the very least to their insurers. I note in the submissions that it is said that you have donated money to charities. I have to say, I don't see any virtue in stealing money or defrauding money from people to give it to other people and charities and make out that you're a big fellow because you do it and I don't find that to be, in this case, in any way mitigatory. I have read the submissions which have been submitted by both the State and your counsel carefully and considered all the factors in them. I have also read the references that have been filed on your behalf and I can only assume that the authors of those have really failed to appreciate your conduct and are unaware of your previous offending. They speak highly of you but that needs to be balanced against the conduct for which you have been convicted. Your record plainly, having regard to the previous conviction and the term of imprisonment for that, is a serious one. Of course, you're not to be punished for that but it makes personal deterrence a very significant factor in this case. 24 The Tribunal then referred to the policy guidelines issued by ASIC in relation to its powers under the Australian Securities Investments Commission Act 2011 (Cth) (ASIC Act), saying it was likely to make a banning order against a person where there are 'serious concerns' about the person and, in particular, where there is a need to protect consumers. Based on the facts, the policy guidelines and the sentencing remarks, the Tribunal concluded (at [26]) that ASIC's decision to make a 'permanent' banning order against Mr Wittensleger pursuant to s 80(1) NCCPA, rather than for a specified period, was the correct and preferable decision. The Tribunal also took into account the Court of Appeal's decision in Wittensleger v The State of Western Australia [2014] WASCA 205 and further, cited the observation the Full Court in Australian Securities Commission v Kippe (1996) 67 FCR 499 (at 508) where von Doussa, Cooper and Tamberlin JJ said: … Although a banning order has the consequence of excluding an individual; from acting as a representative of a dealer or investment adviser, the making of such an order is not designed to punish or impose a penalty on that person for an offence or contravention of any norm of conduct… The immediate and direct legal effect intended by a banning order is not to impose a penalty or punishment on the person concerned, but to be preventative in that it removes a perceived threat to the public interest and to public confidence in the securities and futures industry [or credit activities industry] by removing that person from participation therein. 25 In relation to the financial services decision, the Tribunal followed a similar process of analysis by reference to s 920A of the Corporations Act which provides as follows: 920A ASIC's power to make a banning order (1) ASIC may make a banning order against a person, by giving written notice to the person, if: (a) ASIC suspends or cancels an Australian financial services licence held by the person; or (b) the person has not complied with their obligations under section 912A; or (ba) ASIC has reason to believe that the person is likely to contravene their obligations under section 912A; or (bb) the person becomes an insolvent under administration; or (c) the person is convicted of fraud; or (d) ASIC has reason to believe that the person is not of good fame or character; or (da) ASIC has reason to believe that the person is not adequately trained, or is not competent, to provide a financial service or financial services; or (e) the person has not complied with a financial services law; or (f) ASIC has reason to believe that the person is likely to contravene a financial services law; or (g) the person has been involved in the contravention of a financial services law by another person; or (h) ASIC has reason to believe that the person is likely to become involved in the contravention of a financial services law by another person. (1A) In considering whether, at a particular time, there is reason to believe that a person is not of good fame or character, ASIC must (subject to Part VIIC of the Crimes Act 1914) have regard to: (a) any conviction of the person, within 10 years before that time, for an offence that involves dishonesty and is punishable by imprisonment for at least 3 months; and (b) whether the person has held an Australian financial services licence that was suspended or cancelled; and (c) whether a banning order or disqualification order under Division 8 has previously been made against the person; and (d) any other matter ASIC considers relevant. Note: Part VIIC of the Crimes Act 1914 includes provisions that, in certain circumstances, relieve persons from the requirement to disclose spent convictions and require persons aware of such convictions to disregard them. (1B) To avoid doubt, a person contravenes a financial services law if a person fails to comply with a duty imposed under that law, even if the provision imposing the duty is not an offence provision or a civil penalty provision. (2) However, ASIC may only make a banning order against a person after giving the person an opportunity: (a) to appear, or be represented, at a hearing before ASIC that takes place in private; and (b) to make submissions to ASIC on the matter. (3) Subsection (2) does not apply in so far as ASIC's grounds for making the banning order are or include the following: (a) that the suspension or cancellation of the relevant licence took place under section 915B; (b) that the person has been convicted of serious fraud. 26 A similar submission was made by Mr Wittensleger in relation to s 920A(1) and that submission was correctly rejected. 27 The Tribunal referred to ss 766A, 766B and 920A of the Corporations Act and policies contained in the Regulatory Guide 98-Licencing: Administrative Action Against Financial Services Providers, with particular reference to RG 98.45 and Table 2 at the end of RG 98. As was observed by the Tribunal, RG 98-45 provides that in determining whether or not to pursue administrative action against a person, such as banning orders, consideration must be given to the particular facts of the individual case. Table 2 at the end of RG 98 sets out matters that might be relevant to the making of a permanent banning order. Based on the facts set out in the sentencing remarks of the trial judge and the policy guidelines, the Tribunal concluded that this order was also correct and preferable.

A preliminary decision 28 The main thrust of the complaint in the current application arises from the refusal of the Tribunal on 17 November 2015 to grant an application for an adjournment as sought by Mr Wittensleger. The transcript of that hearing prior to the written decision of the Tribunal is in evidence. It reveals that Mr Wittensleger informed the Tribunal that he had subpoenaed an IT Properties file which had not been provided. Next, an explanation was given that Mr Bartlem and Hunter had had insufficient time to provide it. He said that it was a significant part of his examination of the two witnesses who he intended to examine in the proceedings and so was unable to proceed unless he had that document. The Tribunal explained that the first witness, Mr Bartlem was available by telephone, but the other witness, Mr Thomas, was apparently not in attendance. 29 Mr Wittensleger said he had delivered copies of the relevant summons by Pre-Paid post to their business address and he was assuming that if Mr Bartlem had received his, Mr Thomas would also have received his. It appeared that Mr Thomas may not have been served, but had become aware of the hearing and the fact that his evidence was sought. Reference was made by counsel for ASIC, Ms Black, who also appeared on this application, to the decision in Tasovac v State of Western Australia (2015) WASCA 24 (at [129]) in which McClure P confirmed that where a person is convicted, the sentencing judge is bound by the essential facts giving rise to the conviction and cannot seek to controvert those facts. Where there are facts not essential to the finding of guilt, the sentencing judge must make findings of fact. In this case, the sentencing judge did make those findings. Each of the witnesses, the subject of the summons issued by Mr Wittensleger, had also been witnesses at the criminal trial and it appeared that the evidence Mr Wittensleger was seeking to extract from those witnesses had already been the subject of evidence and findings made at the criminal trial. The Tribunal made the point that it was not open to the Tribunal to go behind the facts upon which the conviction was determined. The Tribunal noted that the matter had gone on for quite some period and the Tribunal had been generous in granting adjournments in order for Mr Wittensleger to obtain information as he was incarcerated. 30 Mr Wittensleger made the submission that the documents that he had subpoenaed were not in any way intended to question the essential facts of the criminal trial, even though they were documents exhibited in the criminal trial. He explained: So, it's not in any way trying to suggest I didn't receive the document or whatever, but purely just to verify the documents were given to me and what representations were made to me when entering into that document… The IT Property file will confirm when the Termination Letter was provided to us and sent from their office. The reason that has been asked for today is there was some conjecture as to whether the document was sent, what time it was sent, where it was sent to. That was evidence given by Mr Bartlem in the criminal trial, so I'm not asking him to recant that evidence or change that evidence. And the IT Property file will just confirm when the letter was sent. The relevance is it will then bookend the activity that I refer to, whether it was over a 12 month period, an 18 month period, 24 month period, and that's the relevance of it in these proceedings… It relates to my argument that there was no intent to carry on any credit activity or act as any intermediary, and if I did so it was as a result of some failure by Hunter to provide adequate documentation suggesting that a licence needed to be obtained prior to entering into that agreement. 31 He made clear that the Termination Letter terminating the arrangement had been dated 18 November 2008 and counsel for ASIC made the point to the Tribunal that there had been a clear finding in the Court of Appeal that the Termination Letter was sent on that date. Mr Wittensleger made it clear that he wanted to challenge Mr Bartlem because he, Mr Bartlem, was not sure whether the Termination Letter was sent, how it was sent or when it was sent, notwithstanding the fact that the jury may have inferred that it was sent. Counsel for ASIC made it clear that at p 10 of the Court of Appeal judgment (Wittensleger [2014] WASCA 205), Hall J also found (at [11]) the Letter was sent to the clients on 18 November 2008. Also (at [60]-[65]) of that decision, his Honour said: 60. The appellant said that when Hunter took the professional fee funding product off the market in 2008 he was required to fill out application forms that nominated an insurer. He said that he asked Meilak what he should put in this section of the application and was told to nominate Allianz. Although there was a change in the nature of the applications the appellant said that he had no recollection of receiving the letter of 18 November 2008 terminating the professional fee funding agreement. He said that even if he had received this letter he would not have considered it as applying to his facility as that facility was not a traditional fee funding product. He said that he attached invoices to the application forms even though they were not apparently relevant to applications for premium funding because his facility was unique and to make the applications stand out (ts 708). He said that notwithstanding the appearance of the applications they were never intended to be loans on behalf of clients. Nirranda was the borrower and accepted liability for the debt. 61 The appellant said in July 2010 he was contacted by Mr Thomas and told that there was a problem with the account into which loans were being paid. He said that he sensed something was not right and Meilak was vague when he rang him for clarification. He assumed that there was an issue regarding documentation. At the meeting on 16 July 2010 he said that it became obvious that something irregular or improper had been done by Meilak. He wanted to distance himself from any wrongdoing by Meilak and wanted to get the proper documentation and security in place (ts 726). 62 The appellant asked another associate to attend the meeting in order to provide guarantees by way of additional security. These documents were completed and signed and the appellant said that at the conclusion of the meeting he believed that Hunter had adequate security and that the outstanding loans would be resolved by way of a repayment plan. However, he subsequently received a letter from Hunter which alleged that he had acted fraudulently. He denied this in a telephone conversation with Mr Bartlem. 63 The appellant said that on 17 November 2008 he sent a letter to Hunter enclosing a discussion paper (exhibit 12, 14 and 14A). The purpose of the discussion paper was to persuade Hunter that they should reconsider their decision to withdraw the traditional fee funding product from the market. The appellant considered that there were deficiencies in Hunter's traditional fee funding product and that the product could be done better (ts 878). 64 In cross-examination the appellant conceded that documentation to provide security for the facility that he claimed he had with Hunter was not put in place. He said that this was a failure on the part of Meilak. He accepted that the only security documentation ever signed was that prepared following the meeting of 16 July 2010 (ts 917 - 918). He also accepted in cross-examination that despite being concerned that the applications he submitted did not reflect the facility arrangement that he claimed to have he did not raise his concerns with other officers of Hunter with whom he had contact, including Thomas and Bartlem. He also accepted that he was aware that Hunter had withdrawn the professional fee funding product from the market in November 2008, though he continued to deny that he had received the termination letter of 18 November 2008. 65 The appellant accepted that he had signed the professional fee agreement on 21 May 2007 but he denied that that document reflected the facility that he negotiated with Meilak. He said that he only signed that agreement at the insistence of Meilak and in the expectation that a more appropriate agreement would be prepared (ts 932 - 933). He accepted that in the email of 17 November 2008 he had referred to 'the termination of our Hunter professional fee funding agreement' but maintained that this did not indicate his awareness of the termination of the agreement between Hunter and JBB, but was a reference to Hunter's standard professional fee agreements and that the word 'our' was a typographical error. (emphasis added) 32 Mr Wittensleger said that he was not going to raise any issue as to whether the Termination Letter was sent, but was going to raise a question as to whether it was received. 33 This inquiry would not have required evidence to be adduced by the two persons the subject of the summons and, in any event, must inevitably have been the subject of a finding in the criminal trial. 34 Mr Wittensleger submitted that a further issue raised was which facility the letter was actually terminating. 35 The Tribunal declined to adjourn the proceeding. Ms Black then opened the case for ASIC, as Mr Wittensleger was unrepresented, and the Tribunal granted a further brief adjournment at Mr Wittensleger's request in light of the ruling. 36 When the matter resumed 20 minutes later, Mr Wittensleger renewed his application for a substantial adjournment and indicated that, alternatively, he would simply proceed on the written submissions. He made the following submission: MR WITTENSLEGER: Member, in light of your ruling involving the IT Properties files, I know Ms Black is not keen on an adjournment and you've mentioned your distaste for an adjournment, as well. But I believe without an adjournment I can't deal adequately with the issue of relevance. I feel that it compromises the way I was going to examine these witnesses. It- there's an issue of credibility with these 45 witnesses with respect to what they asked me to engage in and negotiate not from any relevance to the criminal trial but in terms of their representations with respect to requirements to hold licences, the type of activity I was engaging in, whether there was any chance or propensity I might be acting as an intermediary, engaging in a credit contract. None of their documentation discloses anything of that nature, and it was intended to be an issue as to who has the greater culpability here: the licence-holder, being Allianz, or myself. In the absence of the IT Properties file which I think will carry significant weight as to the level of competence displayed by Allianz in providing this contract with respect to my obligations to ASIC and/or theirs, I believe my case has- my argument is compromised and I don't intend on that basis, if I can't obtain an adjournment, to proceed. I don't intend to call the witnesses, and if the Member needs to adjudicate on the information by way of written submissions in front of you today, then I will work on that basis. 37 The Tribunal in response said: MS WALSH: Mr Wittensleger, this matter has been - it was originally filed on 1 April 2014. There have been countless directions hearings and delays. It's not my distaste for adjournments. I'm subject to an adjournment and listing guideline that was issued by our former President, Garry Downes J. In addition to that, I'm going to quote to you from a High Court decision in Re May. We have a mandate of being fast, economical and quick. Just to have this entire hearing room here today, counsel that have flown in, I gather, from interstate- taxpayers' money for us all to be here. After all this period of time that has lapsed, it really is inappropriate to adjourn. The High Court said in Re May v the Military Rehabilitation and Compensation Commission (2011) 126 ALD 600 emphasise that speed and efficiency, in the sense of minimum delay and expense, are essential to the just resolution of proceedings. Proper opportunity being given to the parties to put their case, but limits have to be placed on steps that parties may wish to pursue as part of the presentation of their case. Delay and cost are to be taken into account. I'm not going to grant an adjournment. 38 Mr Wittensleger continued to stress that he had only found out that day that there was going to be an issue as to relevance with the IT Properties file and he only found out 'an hour ago that it wasn't provided under the subpoena'. 39 Ultimately, Mr Wittensleger decided not to call up the witness and also decided that he would not give evidence himself. Subsequently, the Tribunal gave the written reasons to which I have already referred.

APPLICATION FOR EXTENSION OF TIME TO 'APPEAL' 40 Evidence was relied upon by Mr Wittensleger in support of the application for an extension of time on the basis that he was incarcerated in Acacia Prison. The additional evidence he seeks to adduce, as is apparent from the summary of arguments, evidence and submissions referred to above, relates to Mr Wittensleger's assertion that it is not clear from the Termination Letter what agreement Hunter was purporting to terminate because the written agreement had automatically terminated at the end of the 12 month term. The further agreement entered into between Nirranda and Hunter after May 2008 did not have any written terms as it was an agreement which was predominantly entered into as a result of oral discussions between himself and Hunter. These discussions were consistent with oral discussions between himself and Hunter prior to entering into the further agreement. He says that without obtaining the IT Properties file, Hunter may have purported to terminate the written agreement as the Termination Letter purports to rely on cl 16 in that agreement. 41 He reiterated that the IT Properties file is a file containing information as to a document's properties and is attached to a document that is electronically created. It is an application based information tool which is imbedded in computer software and is attached to documents created on word processors. The information which it will contain are file descriptors, size, date, modification dates and authors. Mr Wittensleger produced a sample screen shot and says that the production by Hunter of the IT Properties file will assist in determining which agreement Hunter sought to terminate. He said the IT Properties file will also assist in determining what, if any, credit agreement was in place at the material time and therefore assist in determining if he was acting as an intermediary or as a borrower. He stated that the production of the IT Properties file would assist to determine whether the further agreement on foot was one which the Corporations Act and/or the NCCPA applied by assisting to identify: (a) which agreement Hunter terminated; (b) if it was intended to terminate the written agreement; (c) if it was intended to terminate the further agreement; (d) if it was intended to terminate both the written agreement and the further agreement; and (e) if it was modified by Hunter to terminate the further agreement and, if so, when it was modified. 42 Mr Wittensleger says that at no time during the terms of the written agreement or the further agreement did Hunter ever inform or otherwise notify him that: (a) he would be acting as an intermediary; or (b) he would be required to hold a licence. 43 He annexes the Termination Letter relied upon in the convictions and which is in the following terms: … Dear Mr Wittensleger Please accept this letter as giving you 45 days written notice of cancellation of the current Professional Fee Funding Agreement in accordance with clause 16. The recent credit crisis has resulted in our requirement to reconsider our involvement in the fee funding business as we currently manage it, along with the recent advice from our credit Insurer that they are not prepared to continue to cover this product. As your facility is presently in a current status, we will continue to allow all existing deals to continue until completion; however we will not be accepting any new loans; as per clause 3.2 of the agreement. Should any deals not remain current and up to date, then we will request repayment of your facility. We regret having to provide this notification, but given the current market, the fact that our current credit Insurer has declined cover on this business and the poor financial performance of your facility overall we are left with no other choices. … Bradley Bartlem Chief Executive Officer Hunter Premium Funding Ltd 44 I will address these matters below when considering the merits of the proposed application to review the Tribunal's decision if leave were granted. Leave for an extension of time will not be granted if the substantive application would have no prospects of success.

GROUNDS OF APPEAL 45 The grounds of appeal are as follows: 1. [Mr Wittensleger] was denied procedural fairness by reason of the Tribunal's refusal to grant [Mr Wittensleger's] request for an adjournment of the review hearing commencing on 17 November 2015 so as to allow [Mr Wittensleger] further time within which to obtain the production of documents relevant to his application for a review hearing. Particulars The documents sought by [Mr Wittensleger] were the subject matter of a Summons to Produce Documents regularly issued by [Mr Wittensleger] to Bradley Bartlem and/or the principal Officer of Hunter Premium Funding Pty Ltd and were relevant to both the determination and the outcome of the appellant's review application. 2. The Tribunal failed to independently review the ASIC decision to impose the banning orders upon [Mr Wittensleger]. Particulars The review was not carried out independently in that the Tribunal placed too much reliance on the sentencing remarks of Judge Curthoys.

CONSIDERATION 46 The question of whether a court should grant an extension of time requires an exercise of discretion in which the following factors would ordinarily be considered: (a) the length of/and any explanation for the delay; (b) the merits of the appeal; and (c) whether there is any prejudice to the respondent albeit that the mere absence of prejudice is not in itself sufficient to justify the grant of an extension of time. 47 I will deal first with the question of the relevance of the production of the IT Properties file in respect of which I granted Mr Wittensleger leave to file supplementary submissions. 48 No challenge has been raised to the timetable of events as summarised by ASIC in its submissions as follows and which reveals that there was ample opportunity at earlier dates to issue the witness summons: a. On 16 April 2014 - Application for review and extension of time application filed with the Tribunal by [Mr Wittensleger]; b. On 18 September 2014- Directions hearing, at which time parties discussed issues relevant to the review; c. On 28 October 2014- Conference, at which time parties again, discussed issues of jurisdiction and other contentions. Directions were made setting out procedural orders for parties to file their respective submissions and evidence in preparation of hearing on 1 April 2015; d. On 1 April 2015- At the commencement of the hearing before [the Tribunal], [Mr Wittensleger] applied for an adjournment to obtain further information. The adjournment was granted, the hearing vacated and directions were made by [the Tribunal] setting further procedural orders for parties to file their respective submissions and evidence; e. On 25 June 2015- Direction hearing before [the Tribunal], directions were made setting out procedural orders for parties to file their respective submissions on issues of jurisdiction in preparation of hearing to be scheduled at a time convenient in the latter part of 2015; f. On 7 August 2015 - Directions hearing before [the Tribunal], directions were made setting out procedural orders for parties to file their respective submissions and evidence in preparation of hearing; g. On 24 September 2015 - Directions hearing before [the Tribunal] for the purposes of discussing any final matters before hearing. [Mr Wittensleger] submitted that he wanted to issue a summons to appear in relation to Mr Bartlem and Mr Thomas; h. On 17 November 2015 - Tribunal hearing before [the Tribunal]. 49 In relation to the further evidence referred to above, submissions were made that there was a further agreement not for a fixed period of time. The parties to the further agreement agreed to be funded by Hunter by terms that were different from those under which the parties obtained funding pursuant to the agreement the subject of the convictions. I pause to observe that this material was adduced in entirely inadmissible format. There was no attempt to reduce the supposed oral agreement to its actual spoken terms. Moreover, if such an agreement existed, there was ample opportunity for evidence to be given in relation to it at the criminal trial or, indeed, for submissions to be made in respect of it before the Tribunal. The specific written agreement was identified for the purpose of the criminal trial and specific findings were made in relation to it. The additional submissions as to the information the IT Properties file would reveal were also produced in a format which was simply conclusionary and argumentative, rather than adduced by reference to any independent expert evidence. In any event, it is plain that the information which Mr Wittensleger would seek to adduce by this additional evidence, if an opportunity to produce it were made available, goes directly to the very foundational facts underlying the convictions in the District Court. It is undoubtedly the case that Mr Wittensleger seeks to controvert the essential facts giving rise to his original convictions. The intended use of the documents on this application (if leave is granted) seeks to 'go behind or otherwise challenge' the essential facts giving rise to the conviction. This is directly contrary to the well-established principle in a number of cases including Gungor, Daniele and Saffron . 50 Further and fundamentally, before the further evidence could be permitted, I would need to be satisfied, amongst other things that it was capable of being 'necessary to establish the grounds of the application' for the purposes of r 33.29 of the Federal Court Rules 2011 (Cth); s 27 of the Federal Court of Australia Act 1976 (Cth); Greater Wollongong City Council v Cowan (1955) 93 CLR 435 per Dixon CJ; Florance v Andrew (1985) 58 ALR 377 per Lockhart J, who suggested that s 27 may be wider than suggested in Greater Wollongong; and CDJ v VAJ (No 2) (1998) 197 CLR 172 per McHugh, Gummow and Callinan JJ. I would need to be satisfied that the further evidence is relevant to the issues on the appeal and to be satisfied that the adducing of the evidence was not for a purpose contrary to law. For the reasons set out above, I am not so satisfied. To the contrary, it is clear that the evidence would be intended to go behind the convictions. 51 The primary ground advanced in the substantive application was that reliance upon the remarks of Curthoys J (at [26] and [40]) of the Tribunal's decision was misplaced as the remarks were dependent upon the finding in the District Court that Hunter had communicated to Mr Wittensleger the termination of their arrangement and Mr Wittensleger disregarded such purported termination. The contention is that there was no finding of fact as to the date of the creation of the Termination Letter and that is why the IT Properties file is required. Mr Wittensleger submits that it is more likely than not that had the Tribunal had the opportunity to have considered the further evidence, it would not have considered the remarks by the trial judge as being determinative or relevant to the banning orders. 52 There is no doubt, in my view, that Mr Wittensleger seeks to adduce evidence for the purpose of contravening the essential facts giving rise to his conviction contrary to several authorities, including Gungor, Daniele and Saffron. The findings both of the trial judge, Judge Curthoys, when sentencing Mr Wittensleger for the 86 counts of fraud on 14 October 2013, and the Court of Appeals judgment, at the passage referred to above by which it unanimously refused leave and dismissed Mr Wittensleger's appeal against conviction and sentence, made clear that the essential factual matters which were determined against Mr Wittensleger are the same as those he wishes now to challenge. I refer to the highlighted portion in the sentencing remarks above. 53 On the hearing before me, counsel for Mr Wittensleger advanced the argument that production of this material may go not to the question of the convictions or even to the question of the steps taken by ASIC, but may, rather, go to the extent of the ban imposed by ASIC. The difficulty with this argument is that even if it is not intended to challenge the actual convictions, and even if the intent is to challenge in part only, namely, the duration of the banning orders, the material relied upon to support those challenges is the very material which constituted the essential fact finding in the convictions. Counsel submitted that notwithstanding, by virtue of the criminal trial, the arrangement with Hunter was terminated by virtue of the letter of 18 November 2015, there were other factors and other arrangements that existed between the parties and those matters should have been canvassed before the Tribunal. Counsel accepted that, notwithstanding that it is quite clear that the specific arrangement was terminated formed an essential part of the findings, there were other matters that should have been placed before the Tribunal because of the nature of the inquiry before the Tribunal. 54 While that may be so, it is certainly not the basis upon which the matter was put to the Tribunal by Mr Wittensleger. While Mr Wittensleger was a layperson, he was nevertheless quite able to articulate that the securing of the evidence of the IT Properties file was essential to show the matters on which he relies in this hearing. Those matters do clearly go to, as counsel appears to concede, the fundamental finding of termination underlying the conviction. It is not open now to advance some new and, it must be said, very vague hypothesis about other arrangements which might have had a bearing in some way on the Tribunal's decision without descending to some particularity in connection with those arrangements. It is reasonable to infer that counsel was unable to do so with clarity, notwithstanding his succinct and well-crafted submissions, because of an absence of instruction in relation to such 'other arrangements'. No admissible affidavit material has been adduced to support these vague contentions. 55 The hearing to which the criminal trial related was entirely directed to the Termination Letter as is abundantly clear from the sentencing remarks of the trial judge who said: On 18 November 2008, the Chief Executive wrote to you and gave you 45 days written notice for cancellation of the professional fee funding arrangement. You received that letter, you received notice of it, and knew beyond the letter as well, and that is obvious from your subsequent correspondence from you to Hunter, that you could no longer apply for loans on behalf of your clients to cover professional fees. 56 It is abundantly clear that the very nature of the fraud alleged against Mr Wittensleger was that, notwithstanding having the knowledge that the professional funding agreement had been brought to an end, he continued to purport to deal as though it had not been brought to an end and, moreover and regardless of the receipt of the Termination Letter, that he was fraudulent in terms of the way he went about it. There was nothing peripheral about it. It was essential to the findings. The Tribunal was correct in those circumstances to decline to receive further evidence which may have any capacity to controvert the essential findings, as to do so would be contrary to law. The entire argument about the IT Properties file also ignores the highly fraudulent conduct repeated on numerous occasions of relying on manufactured or false invoices or documents to support the further advances of large sums of money from Hunter. All of this conduct was undoubtedly seriously fraudulent regardless of the receipt of the Termination Letter. That is sufficient, as the Tribunal correctly held (see [22] above), to justify ASIC acting under s 80(1)(c). 57 No arguments were advanced in support of the second ground of appeal and, in my view, it would have no prospects of success. The Tribunal closely examined all relevant material.

CONCLUSION 58 The treatment by the Tribunal was careful and in accordance with law. In relation to the refusal to adjourn, I am satisfied that: (a) the application for leave to adduce further evidence on the appeal must be refused; (b) the appeal itself would have no prospects of success; (c) the application for extension of time within which to appeal should therefore be refused; and (d) costs should follow the event. 59 The necessary orders will be made accordingly. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Australian Securities Investments Commission Act 2011(Cth)

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