YFFM and Australian Securities and Investment Commission [2009] AATA 409 (6 March 2009)

Last Updated: 9 June 2009

Administrative Appeals Tribunal

REASONS FOR DECISION [2009] AATA 409

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/0595

GENERAL ADMINISTRATIVE DIVISION		)
	Re		YFFM

Applicant

And

AUSTRALIAN SECURITIES & INVESTMENT COMMISSION

Respondent

Tribunal

Mr S Penglis, Senior Member

Date of Decision 6 March 2009

Date of Written Reasons 31 March 2009

Place Perth

CATCHWORDS

Practice and procedure – Banning order – Stay pending hearing – Non-publication order – Order protecting applicant’s details – Relevant Principles
LEGISLATION

Administrative Appeals Tribunal Act, 1975 (Cth) ss 41(2) and 35

Corporations Act, 2001 (Cth) ss 920A and 920B

CASES
Re Commonwealth of Australia and Quirke [1986] AATA 57; (1986) 9 ALD 92
Re Dart and Director-General of the Social Services (1982) 4 ALD 553
Re PTLZ v Australian Securities & Investment Commission [2008] AATA 106; (2008) 100 ALD 648
Re Tweed and Australian Securities & Investments Commission [2007] AATA 1226
Re VBJ and Australian Prudential Regulation Authority [2005] AATA 642; (2005) 87 ALD 747
Re XTWK and Australian Securities & Investments Commission [2007] AATA 1890; (2007) 98 ALD 131

REASONS FOR DECISION

3! March 2009 Mr S Penglis, Senior Member

.

1. On 6 March 2009 I made orders pursuant to section 41(2) of the Administrative Appeals Tribunal Act, 1975 (“the Act”) staying the reviewable decision the subject of thye substantive application. I also made what are commonly referred to as “non-publication” and ‘anonymisation’ orders pursuant to section 35 of the Act.
2. I provided short oral reasons for my decision at the time.
3. It transpires that the proceedings were not recorded, and therefore a transcript of my reasons is not available.
4. At the request of the respondent, I provide the following written reasons for my decision.
5. On 4 February 2009 a delegate of the respondent made an order pursuant to sections 920A and 920B of the Corporations Act, 2001 prohibiting the applicant from providing any financial services for a period of 5 years.
6. That is the reviewable decision the subject of the applicant’s substantive application to the Tribunal.
7. The principles which are relevant when considering an application for an order pursuant to section 41(2) of the Act are well established. The factors are effectively:
   • the prospects of success or the merits of the applicant’s substantive case on review;
   • whether there would be prejudice to the applicant or anyone else if the stay was not granted;
   • the public interest; and
   • whether the review application, if successful, would be rendered nugatory or pointless if the stay was not granted.
8. Relevant authorities include Re VBJ and Australian Prudential Regulation Authority [2005] AATA 642; (2005) 87 ALD 747: Re Tweed and Australian Securities & Investments Commission [2007] AATA 1226: Re XTWK and Australian Securities & Investments Commission [2007] AATA 1890; (2007) 98 ALD 131.
9. It was common cause that in considering the question of the applicant’s prospects of success for the purposes of this application, it is inappropriate to conduct a preliminary trial of the issues: Re Dart and Director-General of the Social Services (1982) 4 ALD 553. What the Tribunal must do is consider whether there are facts and circumstances which, if established at the substantive hearing, would provide a basis for the applicant’s success on the review application, or whether there are points of law raised which, if sustained, would lead to that conclusion: Re Commonwealth of Australia and Quirke [1986] AATA 57; (1986) 9 ALD 92.
10. The short point raised by the applicant in this matter is whether it was properly open to the respondent’s delegate to make an inferential conclusion that the applicant possessed “inside information” as defined in section 1042 of the Corporations Act. I am satisfied that is an argument which, if established at the substantive hearing, will provide a basis for the applicant’s success in the review of the substantive application. Of course, I have not considered, and therefore expressed no view as to, whether the applicant will successfully establish that at the substantive hearing, as it is neither necessary nor appropriate for me to do so for present purposes.
11. I therefore am satisfied that the applicant has established the first of the factors which I have identified.
12. As to the second factor, namely that of prejudice, I am satisfied that the applicant will be prejudiced if a stay is not granted. There is evidence in the form of an affidavit from the applicant as to the prejudice the applicant would suffer if the applicant were effectively not permitted to work until such time as the Tribunal heard and determined the substantive application. I do not intend to detail the evidence given by the applicant as to do so may enable the applicant’s identity to be determined.
13. As to the public interest, I accept the submission made by the Mr Donaldson, Senior Counsel for the applicant, that it is important to note that the respondent’s delegate did not make any finding under section 920A(1)(f) of the Corporations Act to the effect that she had reason to believe that the applicant would not comply with a financial services law in the future.
14. Given that, and given the applicant has no history of any prior breach of a financial services law, I accept that this is not a case in which the conduct which the respondent’s delegate found on the evidence gives rise to any immediate risk to persons who might deal with the applicant and that there is no evidence that the public at large or financial markets generally would be imperilled if the stay were granted.
15. I also note in this regard that, in the delegate’s decision, it was accepted that the applicant did not personally benefit from the conduct in question.
16. I am therefore satisfied that there is nothing in the public interest that, in the circumstances of this case, militates against the grant of the order sought.
17. As to the final factor, I am satisfied that, to a large extent, the review application, if successful, would be rendered nugatory if the stay is not granted. In particular I accept that if a stay is not granted the applicant’s hard earned reputation will be damaged, and that that damage will not be entirely reversed if the applicant ultimately succeeds on the review application: see generally Re PTLZ v Australian Securities & Investment Commission [2008] AATA 106; (2008) 100 ALD 648.
18. In addition to the above factors, it is evident that the substantive application can be progressed and determined expeditiously. It was agreed by the parties’ legal representatives the final hearing will take no more than a day and can be heard in a matter of only a few months from now. That is also a relevant factor to be taken into account and one which favours the grant of relief sought by the applicant.
19. For these reasons, I am of the view that a stay of the reviewable decision should be granted.
20. As for orders pursuant to section 35 of the Act, the applicant initially sought an order that the hearing be conducted in private. During the course of submissions, Senior Counsel for the applicant did not press the Tribunal to make such an order, although reserved the applicant’s position to apply for such an order at a later date.
21. That then left the question as to whether or not a “non-publication” order should be made, as well as an order protecting the applicant’s identity in these proceedings.
22. Again, the principles to be applied in determining such matters are well settled. In particular, a “non-publication” order is usually an important adjunct to the grant of a stay as the publication of the disqualification decision itself could negate any later favourable finding of the Tribunal: see, for example, VBJ and Australian Prudential Regulation Authority [2005] AATA 642; (2005) 87 ALD 747.
23. That is not to say, however, that the two will invariably go hand in hand. In each case a balancing exercise must be undertaken, namely balancing the importance of informing the public of the existence of banning orders on the one hand, and the importance of preserving and protecting the applicant’s reputation pending that person’s entitlement to have this Tribunal review the decision on the other hand.
24. In this case, the factors which cause the balance to weigh in favour of the applicant include:
    • the applicant has no history of any prior breaches of financial services law;
    • the applicant did not personally benefit from the conduct the subject of the reviewable decision;
    • there was no finding under section 920A(1)(f) of the Corporations Act;
    • the substantive application will be heard and determined by this Tribunal within a relatively short timeframe.
25. As to an order protecting the applicant’s identity in these proceedings, the Tribunal notes that such an order was not strongly opposed by the respondent in the event that the Tribunal concluded that a stay ought be granted and a “non-publication” order made.
26. The effective ‘anonymisation” of an applicant’s identity is so as to ensure that a “non-publication” order is not defeated by administrative actions within the Tribunal, such as the listing of matters for hearing. Moreover, it allows for the Tribunal’s decisions to be made available to the public in the ordinary course without defeating orders made by the Tribunal which otherwise are designed to protect and preserve the identity of the applicant pending the ultimate determination of the substantive application.
27. In this matter, given a stay and “non-publication” orders are to be made, I find no reason exists why an order should not be granted protecting the applicant’s identity for the purpose of these proceedings pending the ultimate determination of the applicant’s substantive application for review. Such an order should therefore be made.
    

I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Mr S Penglis, Senior Member

Signed: ......(sgd) T Freeman ...

Associate

Date/s of Hearing 6 March 2009

Date of Decision 31 March 2009

Counsel for the Applicant Mr Donaldson SC

Solicitor for the Applicant Tottle Partners

Counsel for the Respondent Mr Quinlan

Solicitor for the Respondent Mr Rassool